HP 12c Platinum - The Rent or Buy Decision

Appendix E: Formulas Used 263
File name: HP 12c Pt Converted_user's guide_English_HDP0F123E02_080207 Page: 257 of 281
Printed Date: { 2007/8/2Dimension: 14.8 cm x 21 cm
The Rent or Buy Decision
Market Value = PRICE(1 + I)
n
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