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.

a.

Since the costs would be the same over the 4 year period, she will have made a good decision if the property value does not decrease.

b.

She made a fairly good decision. Buying the townhome will be cheaper over the 4 year period as long as she doesn’t have major repairs to make.

c.

She made a poor decision if the property value does not increase. Renting the townhome would be cheaper over the 4 year period.

d.

There is not enough information given to determine which option is best.