Based on the following data, would you recommend buying or renting? ...
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Accounting
Based on the following data, would you recommend buying or renting?
Rental Costs Buying Costs
Annual rent
$
7,630
Annual mortgage payments
$
10,300
(9,700 is interest)
Insurance
$
170
Property taxes
$
1,880
Security deposit
$
900
Down payment/closing costs
$
5,000
Growth in equity
$
600
Insurance/maintenance
$
1,300
Estimated annual appreciation
$
1,950
Assume an after-tax savings interest rate of 7 percent and a tax rate of 32 percent. Assume this individual has other tax deductions that exceed the standard deduction amount.
a.
Calculate total rental cost and total buying cost. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)
Rental cost
$
Buying cost
$
b.
Would you recommend buying or renting?
Buying
Renting
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