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The following assumptions are made for each investigation The original mortgage is 300 000 amortized over 25 years at 3 99 compounded semi annually Unless otherwise indicated assume monthly payments are made Unless otherwise indicated assume the interest rate remains constant during the amortization period Your answers can be entered directly on this accianmont hut planen hand in all rough work no miestas 7 TONG Unchamp vs remung Is it better to own a home or to rent The answer to this question is no longer as one sided as it has been for years The attached article gives a financial breakdown comparing home ownership costs to rental costs The mortgage used in the home ownership case is the same as defined for the previous Investigations you just completed Read the article and answer the following 1 What conclusion was reached by Mr Tristani the man who completed the study regarding whether it s better to buy or rent these days 2 What factors other than financial do you think influence whether one buys a house or rents 3 The total mortgage payments for owning the home described here are 472 929 Look back to the results of Investigations 1 2 and 3 which you just completed Identify specifically how the homeowner could have decreased his her mortgage cost EU THAT 4 The maintenance cost of this house each year is set at 4 of the market value of the house According to Mr Tristani this cost goes up by about 3 each year as does the value of the house Calculate the maintenance costs for the first 5 years of the house The increase in the rate of maintenance has been done for you Year of home ownership 1 2 3 4 5 Market value of house 400 000 Rate of maintenance 4 0 4 12 4 24 4 37 4 50 Maintenance costs

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