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Thu 16 Jul, 2009 07:14 am
Rick is currently renting a house for $1800 a month. The current owner is willing to sell the house for a down payment of $42,000. He would then make monthly payments of $1100 a month. How many months would it take for his total costs to be less to purchase the house rather than continue to rent?
Can you help me solve this a am having trouble?
Let m be the time passed in months.
Expenses renting: 1800*m
Expenses buying: 42000 + 1100*m
You're looking for the point where the expenses buying are less than or equal to the expenses renting.
Homework, right? Does us solving it for you help you learn this stuff? I don't think so. A hint, tho. How much does he save on each month's payment? How long does it take for that savings to equal the additional cost (the down payment)?
Your teacher has made the figures easy to do in your head. His monthly payments are $700 less if he buys the house, compared to renting it. His total cost will be less after his down payment is made up by the monthly saving. How many times does 700 go into 42,000?
aw, contrex, you gave it away. I probably gave away more than I should have too. Let them work it out themselves.
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