this question has two parts. first, answer part a. then, answer part b. michael wants to buy an investment…

this question has two parts. first, answer part a. then, answer part b. michael wants to buy an investment property. rents in the area for properties like the one he wants to buy average $965 per month. banks use the price - to - rent ratio, \\(\\frac{price}{annual\\ rent}\\), as a metric to determine whether a property is a good investment. find the price - to - rent ratio for each property. round to the nearest hundredth.\n| property | wingate ave. | sunbury rd. | hempstead rd. | college ave. |\n|--|--|--|--|--|\n| price ($) | 135,900 | 220,900 | 210,400 | 202,900 |\n| monthly rent for a similar property ($) | 1230 | 1650 | 1315 | 1450 |

this question has two parts. first, answer part a. then, answer part b. michael wants to buy an investment property. rents in the area for properties like the one he wants to buy average $965 per month. banks use the price - to - rent ratio, \\(\\frac{price}{annual\\ rent}\\), as a metric to determine whether a property is a good investment. find the price - to - rent ratio for each property. round to the nearest hundredth.\n| property | wingate ave. | sunbury rd. | hempstead rd. | college ave. |\n|--|--|--|--|--|\n| price ($) | 135,900 | 220,900 | 210,400 | 202,900 |\n| monthly rent for a similar property ($) | 1230 | 1650 | 1315 | 1450 |

Answer

Explanation:

Step1: Recall price - to - rent ratio formula

The price - to - rent ratio formula is $\text{Price - to - rent ratio}=\frac{\text{Price}}{\text{Annual rent}}$. Since we have monthly rent, we first calculate the annual rent by multiplying the monthly rent by 12.

Step2: Calculate price - to - rent ratio for Wingate Ave

Annual rent for Wingate Ave: $1230\times12 = 14760$. Price - to - rent ratio: $\frac{135900}{14760}\approx9.21$.

Step3: Calculate price - to - rent ratio for Sunbury Rd

Annual rent for Sunbury Rd: $1650\times12=19800$. Price - to - rent ratio: $\frac{220900}{19800}\approx11.16$.

Step4: Calculate price - to - rent ratio for Hempstead Rd

Annual rent for Hempstead Rd: $1315\times12 = 15780$. Price - to - rent ratio: $\frac{210400}{15780}\approx13.33$.

Step5: Calculate price - to - rent ratio for College Ave

Annual rent for College Ave: $1450\times12=17400$. Price - to - rent ratio: $\frac{202900}{17400}\approx11.66$.

Answer:

Wingate Ave: 9.21 Sunbury Rd: 11.16 Hempstead Rd: 13.33 College Ave: 11.66