Rent Near Campus Or Commute? Project #2 Team 6

Team Members Paula Mitchell – OrganizerPaula Mitchell – Organizer William Ha – Tech.William Ha – Tech. Geoff Bachanas - SummarizerGeoff Bachanas - Summarizer

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

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

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

Other Assumptions Inflation rate of 2.54%Inflation rate of 2.54% 4 more years until student graduates4 more years until student graduates Student has part-time job starting at $12.50/hourStudent has part-time job starting at $12.50/hour Student gets $1 raise each yearStudent gets $1 raise each year

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

EUAW = $ EUAW = $

EUAW = $ EUAW = $

EUAW = -$ EUAW = -$

Most Economic Choice Live in Riverside with ParentsLive in Riverside with Parents

Sensitivity Analysis Observed EUAW sensitivity to changes in:Observed EUAW sensitivity to changes in: Living ExpensesLiving Expenses InflationInflation Gas PricesGas Prices Hourly wageHourly wage

Rent, bills, spending habits can easily affect EUACRent, bills, spending habits can easily affect EUAC

Not very sensitive to inflation Inflation only affects cost slightly

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

Fairly sensitive to initial wageFairly sensitive to initial wage Annual raise adds almost $1000/yearAnnual raise adds almost $1000/year Higher pay = higher EUABHigher pay = higher EUAB

References istoricalInflation.aspxhttp://inflationdata.com/inflation/Inflation_Rate/H istoricalInflation.aspxhttp://inflationdata.com/inflation/Inflation_Rate/H istoricalInflation.aspxhttp://inflationdata.com/inflation/Inflation_Rate/H istoricalInflation.aspx (maps) (maps)