Standard Deviation; Factorial; The Rent Or Buy Decision - HP 0012C-90001 User Manual

192 Appendix D: 192 Appendix D: Formulas Used Formulas Used
192 192 Appendix D: Appendix D: Formulas Used Formulas Used





r



2


x




Standard Deviation

Standard Deviation Standard Deviation Standard Deviation
2


n x

s
x

n n
(

Factorial

Factorial Factorial Factorial
0! = 1
n n
For > 1 where
n


n i
!

i
1

The Rent or Buy Decision

The Rent or Buy Decision
The Rent or Buy Decision The Rent or Buy Decision
Market Value = PRICE(1 +
where:
I
= appreciation per year (as decimal)
n
= number of years
Net Cash Proceeds on Resale = Market Value – Mortgage Balance – Commission
The interest rate is obtained by solving the financial (compound interest) equation
i
for using:
n = number of years house is owned
PV = down payment + closing costs
PMT = mortgage payment + taxes + maintenance – rent – (% tax)
(interest + taxes)
FV = net cash proceeds on resale
Annual interest rate = 12 ×
 

x y 

xy

n



 
2

x
2

 
y
 
n


 
 
2
 
x n

s
y
) 1
is an integer:
n
I
)
i


2
y

n


 
2
2


y y

n n
( ) 1