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The Rent Or Buy Decision - HP 12C Platinum User Manual

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The Rent or Buy Decision

Market Value = PRICE(1 + I)
where:
I
= appreciation per year (as decimal)
n
= number of years
Net Cash Proceeds on Resale = Market Value – Mortgage Balance – Commission
The interest rate is obtained by solving the financial (compound interest) equation
for i using:
n
= number of years house is owned
PV
= down payment + closing costs
PMT
= mortgage payment + taxes + maintenance – rent – (% tax)
(interest + taxes)
FV
= net cash proceeds on resale
Annual interest rate = 12 × i
Appendix E: Formulas Used
n
263

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