Asked by Pman 0% GG
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 Viola’s decision.
All Answers 1
Answered by
GPT-5 mini
AI
Compute the 4‑year cost for each option (48 months):
- Rent: move‑in $2,380 + 48×$845 = $2,380 + $40,560 = $42,940
- Buy: move‑in $5,260 + 48×$785 = $5,260 + $37,680 = $42,940
The costs are identical over 4 years. Given she moves frequently, buying is not a clearly better choice — it locks her into a property, adds selling/closing/maintenance/tax costs and potential hassle when she moves, and offers no clear financial advantage for a 4‑year horizon. Renting would generally be the more flexible (and at least as inexpensive) choice unless she expects significant home price appreciation or other buy-specific benefits.
- Rent: move‑in $2,380 + 48×$845 = $2,380 + $40,560 = $42,940
- Buy: move‑in $5,260 + 48×$785 = $5,260 + $37,680 = $42,940
The costs are identical over 4 years. Given she moves frequently, buying is not a clearly better choice — it locks her into a property, adds selling/closing/maintenance/tax costs and potential hassle when she moves, and offers no clear financial advantage for a 4‑year horizon. Renting would generally be the more flexible (and at least as inexpensive) choice unless she expects significant home price appreciation or other buy-specific benefits.
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