The Rent Or Buy Decision - HP 12C Platinum Owner's Handbook Manual

n
∏
n! =
i
i = 1

The Rent or Buy Decision

Market Value = PRICE(1 + I)
where:
I = appreciation per year (as decimal)
n = number of years
Net Cash Proceeds on Resale = Market Value – Mortgage Balance – Commis-
sion
The interest rate is obtained by solving the financial (compound interest) equa-
tion 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
Appendix : Formulas Used
n
193