Question

The total cost of owning a home for 6 years is $120,000. Therent for a comparable home is $1500 per month. If you had invested the аdown payment for the home, you could have earned $10,000 in interest.After 6 years, how much more, in dollars, is the cost of owning comparedto the cost of renting?Submit

Answer 1

Given

6 years is 120000

HouseB is 1500 per month

12 * 1500 = 180000

Since there's 12 months in a year and every month you pay 1500 in rent

180000 * 60 (5 * 12 = 60 which means 60 months in total for rent)

180000 * 60 = 10,800,000 dollars.

So after 6 years the person who owns a home pays a total of 120000 while the person renting the some what of the same home pays 10800000 dollars.

Subtract 10,800,000 - 120000 = 10680000

Costs 10,680,000 dollars more renting the home after 6 years then buying/owning it for 120,000.