Using a MARR of 10%, use Future Worth Analysis to compare the following Alternatives.
ALTERNATIVE 1: Buying a Home and Selling in 6 Years
| Home List Price |
$199,900 |
| Down Payment and Buying Closing Costs |
$41,980 |
| House Payments |
$1,287.12 per month |
| Annual Routine Repair and Maintenance |
$2,000 per year |
| Tax Break |
$3,861.36 per year |
| Annual Appreciation |
$3,113 |
| Selling Closing Costs |
$2,000 |
ALTERNATIVE 2: Renting a Home for 6 Years
| Damage Deposit |
$900 |
| Rental Payment |
$1,200 per month |
A) Show workings for Future Worth Analysis of each Alternative.
B) Which alternative should you choose?
C) How would the Future Worth change if the time period is changed to 2 years? What about 25 years?