imRaj wrote:
The amount of 5202 is a one time maintenace and security fee for 3 years. The amount could be more if number of years were more. But that is not something we should get worried about. In that case, the property purchased would not require any investment after 10 years. The yearly would then decrease as we calculate for 20 years or 30 years.
The amount for lease has to be calculated for 3 years and for purchase for 10 years.
Solution:
Leasing the building for three years will require a monthly payment of $4,850 plus a one-time maintenance and security fee of $5,202. the average annual cost of leasing: Notice we are asked for
average, as in the year security fees is paid, the annual amount will be more.
Monthly payment = 4850, so annual = 4850*12
Security fee for 3 years = 5202, so annual = 5202/3 = 1734
Total = 58200 + 1734 = 59934$
If you purchase the building for $450,000 at 4% for 10 years, the monthly mortgage payment will be $4,556. the total annual payment on the mortgage:Here, the payment is constant = 4556*12 = 54672$