You are planning to buy a house in Gulburg green, you can either lease the house from the society or purchase it with a six-year loan. The house you wish to buy costs Rs.30,000,000. The dealer has a special leasing arrangement where you pay Rs.1,700,000 today and Rs.450,000 per month for the next  six years. If you purchase the house, you will pay it off in monthly payments over the next six years at required rate of return of 6 percent per annum. You believe that you will be able to sell the house for Rs.35,000,000 in six years. 

Required to calculate and answer the following : 

1.What option will be beneficial for you either buying  house in single payment or buying on lease. 

2. Assume you purchase the house in onetime payment and sold it for 35,000,000 after six years on same interest rate compounding monthly will this be a good and profitable deal for you.

Answer rating: 100% (QA)

Option 1 Buying the house with a sixyear loan Calculate the monthly payment using the loan amortizat... View the full answer