HP 113394 User Guide - Page 168
Example, Keystrokes, RPN mode, ALG mode, Display
UPC - 808736340502
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168 Section 12: Real Estate and Lending Example: You are being transferred for 4 years to a distant city and are faced with the decision of whether to rent or to buy a house. A quick survey of the housing market indicates that you can purchase an acceptable house for $270,000 with a $7,000 down payment on a 30-year mortgage at 6% interest. The closing costs would be about $3,700. Selling costs include a 6% commission for resale and miscellaneous other fees that amount to another 2% of the sale price. Housing in the area is appreciating 5% per year. Property taxes would be about $300 per month, and you estimate that maintenance would cost an additional $165 per month. An alternative would be to rent a similar dwelling at $900 per month and to invest the difference between the purchase cost and rent at 3% interest. Your personal income tax rate (marginal) is 25% Federal and 5% State. Which alternative is more financially attractive? Keystrokes (RPN mode) f] g fCLEARH 7000?1 30?2 6?3 300?4 165?5 3700?6 8?7 900?8 3?9 30?.0 fCLEARG 4n 5¼ 270000$ t Keystrokes (ALG mode) f[ g fCLEARH 7000?1 30?2 6?3 300?4 165?5 3700?6 8?7 900?8 3?9 30?.0 fCLEARG 4n 5¼ 270000$ t Display 0.00 7,000.00 Down payment. 30.00 Life of mortgage. 6.00 Interest rate. 300.00 Property taxes. 165.00 Monthly expenses. 3,700.00 Closing costs. 8.00 Resale costs (as a percentage). 900.00 Rent. 3.00 Savings interest rate. 30.00 Tax bracket. 30.00 Clear financial registers. 4.00 Years in investment. 5.00 Yearly appreciation rate. 270,000.00 House price. 53,095.65 NCPR (calculated). File name: hp 12c pt_user's guide_English_HDPMF123E27 Page: 168 of 275 Printed Date: 2005/8/1 Dimension: 14.8 cm x 21 cm