viola has to relocate for her job. she finds a townhome with an option to rent or buy. the conditions of…

viola has to relocate for her job. she finds a townhome with an option to rent or buy. the conditions of each are shown below. rent: move - in costs of $2,380 and monthly payment of $845. buy: move - in costs of $5,260 and monthly payment of $785. viola moves frequently due to her job, but she thinks that she will stay in the area for 4 years. therefore, she decided to buy. choose the best evaluation of violas decision. a. since the costs would be the same over the 4 - year period, she will have made a good decision if the property value does not decrease. b. she made a fairly good decision. buying the townhome will be cheaper over the 4 - year period as long as she doesnt have major repairs to make. c. she made a poor decision if the property value does not increase. renting the townhome would be cheaper over the 4 - year period. d. there is not enough information given to determine which option is best.

viola has to relocate for her job. she finds a townhome with an option to rent or buy. the conditions of each are shown below. rent: move - in costs of $2,380 and monthly payment of $845. buy: move - in costs of $5,260 and monthly payment of $785. viola moves frequently due to her job, but she thinks that she will stay in the area for 4 years. therefore, she decided to buy. choose the best evaluation of violas decision. a. since the costs would be the same over the 4 - year period, she will have made a good decision if the property value does not decrease. b. she made a fairly good decision. buying the townhome will be cheaper over the 4 - year period as long as she doesnt have major repairs to make. c. she made a poor decision if the property value does not increase. renting the townhome would be cheaper over the 4 - year period. d. there is not enough information given to determine which option is best.

Answer

Explanation:

Step1: Calculate total rent cost

First, find number of months in 4 years ($4\times12 = 48$ months). Then calculate total rent cost as move - in cost plus monthly payment times number of months. Total rent cost = $2380+845\times48$. $2380 + 845\times48=2380+40560 = 42940$.

Step2: Calculate total buy cost

Calculate total buy cost as move - in cost plus monthly payment times number of months. Total buy cost = $5260+785\times48$. $5260+785\times48 = 5260+37680=42940$.

Step3: Evaluate decision

Since costs are equal over 4 - year period, decision depends on property value change. Good decision if property value doesn't decrease.

Answer:

a. Since the costs would be the same over the 4 year period, she will have made a good decision if the property value does not decrease.