Given the information here, what is the annual cost of owning?
• home value $ 300,000
• annual mortgage payments $ 19,200
• annual property taxes $ 4,800
• annual homeowner's insurance $ 1,200
• estimated maintenance and repairs 1 % of home value
• growth in equity $ 3,000
• tax savings (mortgage interest and property tax) $ 2,800
• estimate annual appreciation 1.5 % of home value
a. $300,000b. $38,500c. $28,200d. $338,500e. $17,900

Option (e) is correct.

Explanation:

Estimate maintenance cost = Home value × Estimated maintenance and repairs 1 % of home value

                                             = $300,000 × 1%

                                             = $3,000

Estimate Annual appreciation = Home value × Estimate annual appreciation 1.5 % of home value

                                             = $300,000 × 1.5%

                                             = $4,500

Total costs:

= mortgage payments + property taxes + homeowner's insurance + Estimate maintenance cost

= $ 19,200 + $ 4,800 + $ 1,200 + $3,000

= $28,200

Benefits = Growth in equity + Tax savings + Estimate Annual appreciation

              = $ 3,000 + $ 2,800 +  $4,500

              = $10,300

Therefore,

Annual cost of owning = Total costs - Benefits

                                      = $28,200 - $10,300

                                      = $17,900

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explanation:

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