As one of India’s rising number of middle-income earners, recent MBA graduate Krishna Chaitanya faced a personal dilemma, how could he balance traditional cultural considerations with a desire to create his own personal financial plan.
Would taking the traditional path of buying his own home cramp his new lifestyle? Faced with a buy-versus rent dilemma, he wondered if he could solve this problem by applying his financial knowledge, using concepts he learned while studying for his MBA .
This series of case studies can be used in a personal finance course or in corporate finance course to help students understand the concept and practical applications of the time value of money. The case will help students to understand the quantitative analysis of a buy-versus-rent decision using the time value of money, cash flows, opportunity cost, and annuities. Students will also explore qualitative considerations and their impact on buy-versus-rent decisions.