HP 113394 User Guide - Page 258
Net Cash Proceeds on Resale = Market Value - Mortgage Balance - Commission
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258 Appendix E: Formulas Used 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 File name: hp 12c pt_user's guide_English_HDPMF123E27 Page: 258 of 275 Printed Date: 2005/8/1 Dimension: 14.8 cm x 21 cm
258 Appendix E: Formulas Used
File name: hp 12c pt_user's guide_English_HDPMF123E27
Page: 258 of 275
Printed Date: 2005/8/1
Dimension: 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