15 Required information The following information applies to the questions displ

Question

15 Required information The following information applies to the questions displayed below) Part 1of5 Derek and Meagan Jacoty recenby gadusted from State Unlversity and Derek acceptesd a job im bausiness consuting erited $56,000 from her grandlather who recently home. They located a rental home that meets while Meagan accepted a job in computer programming Meagan in passed away The couple is debating whether they should buy or rent a their needs. The monthly rent is $2,950 They also found a three-bedroom home that would cost $256,000 to purchase The Jacobys could use Meagan's inheritance for $200,000 to acquire the home They have the percent on the loan or paying no points and recelving a fixed interest rate of a down payment on the home. Thus, they would need to borrow option of paying two discount points to receive a foced interest rate of 45 575 percent for a 30-year fixed loan Though anything could happen, the couple expects to live in the home for no more than five years before relocating to a dferent region of the country Derek and Meagan don't have any school-related debt so they will save the $56.000 they don't purchase a home.Also, consider the following information The couple's marginal tax rate is 25 percent Regardless of whether they buy or rent, the couple wil temize their deductions . If they buy the Jacobys would purchase and move into the home on January 1,2017 they buy the home, the property taxes for the year are $4.300 Disregard loan-related fees not mentioned above . Iif the couple does not buy a home, they wll puf their money into their savings account where they earn 500 percent annual interest unstated costs are equal between the buy and rent on Required: Help the Jacobys with their decisions by answerning the folowing questions: (Leave no answer blank. Ente .""??? Jacoeys decide to rere the home, what is ther after tal est ofthe Nenai the hitropademon hen the sans eccount in your analyn? (Round your intermediete celculanions o the neerest whole dolar amount) 5 16 1 4 5 6 8 O IP

Explanation / Answer

a. Aftertax cost = $33300

Rent the home Description Amount Calculations 1. Monthly rent $ (2950) 2. Total rent payments for the year (35400) (1) × 12months 3. Interest earned on inheritance 2800 $56000 × 5% 4. Taxes on earnings (700) (3) × 25% 5. Aftertax interest earnings 2100 (3) + (4) Total aftertax cost of renting for first year $ (33300) (2) - (5)

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.