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Rent Near Campus Or Commute?

Rent Near Campus Or Commute?. Project #2 Team 6. Team Members. Paula Mitchell – Organizer William Ha – Tech. Geoff Bachanas - Summarizer. Scenario 1. Student lives at home with parents in Riverside Rent and utilities are free Commute is about 30 mi. (one way)

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Rent Near Campus Or Commute?

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  1. Rent Near CampusOr Commute? Project #2 Team 6

  2. Team Members • Paula Mitchell – Organizer • William Ha – Tech. • Geoff Bachanas - Summarizer

  3. Scenario 1 • Student lives at home with parents in Riverside • Rent and utilities are free • Commute is about 30 mi. (one way) • Average gas price is $2.29 per gallon • Less time for work and studies • Work for about 18 hours per week

  4. Scenario 2 • Live with relative in Orange County • Small $250 rent for a room • Utilities are free, full bathroom and kitchen privileges • About 18 mi. to school (one way) • Average gas price is $2.25 per gallon • Allows for 21 hours of work per week

  5. Scenario 3 • Rent a 2 bedroom apartment near campus with a friend • Split costs of rent and utilities • 5 mi. commute to school (one way) • Average gas price is $2.18 per gallon • Work for 24 hours per week

  6. Other Assumptions • Inflation rate of 2.54% • 4 more years until student graduates • Student has part-time job starting at $12.50/hour • Student gets $1 raise each year

  7. Equivalent Uniform Annual Worth Analysis (EUAB-EUAC) • Costs increase annually with inflation (geometric series) • Benefits from work income increase arithmetically due to annual raise • Final decision based on maximizing EUAW

  8. EUAW = $1732.91

  9. EUAW = $1610.11

  10. EUAW = -$1788.35

  11. Most Economic Choice • Live in Riverside with Parents

  12. Sensitivity Analysis • Observed EUAW sensitivity to changes in: • Living Expenses • Inflation • Gas Prices • Hourly wage

  13. Rent, bills, spending habits can easily affect EUAC

  14. Not very sensitive to inflation • Inflation only affects cost slightly

  15. Living near campus hardly affected due to short drive • More worth to live in O.C. above $2.50/gal.

  16. Fairly sensitive to initial wage • Annual raise adds almost $1000/year • Higher pay = higher EUAB

  17. References • http://www.apartmentguide.com • http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx • www.yahoo.com (maps) • www.sigalert.com • www.honda.com • www.chevron.com • http://www.colonytire.com/maintenance.html • www.consumerreports.com

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