Question

The home for sale is listed at $150,000.00. They have $30,000.00 for a down payment and are qualified for a fixed rate 30-year mortgage with an annual interest rate of 4.2%.

The rental home is currently $900.00 per month, with rent expected to increase approximately $75.00 every 4 years.

What is the total first-year cost when renting the home?
a. 10,800.00
b. 11,400.00
c. 11,200.00
d. 900.00

Answer 1

Estimate: $900.00

Explanation:

This cannot be A, B, or C, as it won't make sense with the increase of 75$ each 4 years, with 30K down payment,

Answer 2

• A. $10800

Explanation:

The rental is $900 per month and no change during the first year.

Total rental cost for the first year:

• 12*900 = 10800

Correct choice is A