If interest rates could be deducted from income

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Reference no: EM1313870

Q. 1. If the mortgage rate raises from 5% to 10%, yet the appreciation of houses which consumers can buy rises from 2% to 9% would you be more likely or less likely to buy a house as an investor?

2. If interest rates could be deducted from income, would an investor change his/her decision based on question 1?

3. In the case of question 2, if taxes on the property were fully deductible from income earned, would this change the investors decision from question 1?

4. Explain how do depreciation costs on the house deducted from income affect the outcome of question 1 during an inflationary or deflationary economy?

Reference no: EM1313870

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