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're planning on getting an apartment and are thinking about either: A) Buying furniture B)...

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Finance

're planning on getting an apartment and are thinking about either: A) Buying furniture B) Renting a furnished apartment

Some assumptions: 1. You're making a decision for 5 years of college. 2. New furniture costs about $3,000 3. You can sell your furniture after 5 years for $500 4. Renting a furnished apartment costs $100 more per month than an unfurnished apartment 5. An interest rate of 6% per year, compounded monthly should be used to value money in the future

Questions to answer: 1. What is the Equivalent Uniform Annual Cost of buying furniture and selling it when you're done? 2. What is the Equivalent Uniform Annual Cost of renting a furnished apartment? 3. How much would you save in today's dollars (P) to buy furniture? 4. If it takes you 1 day (8 hours) to buy the furniture how much are you paying yourself per hour to buy furniture instead of rent a furnished apartment?

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