MATHEMATICAL CALCULATIONS IN THE ACQUISITION OF COTTAGE - STYLE RESIDENTIAL PROPERTIES

Abstract

The process of purchasing cottage - style residential properties involves complex financial decision - making that requires the integration of mathematical modeling and financial evaluation techniques. This research examines the mathematical foundations applied in calculating total acquisition cost, mortgage payment structures, compound interest fccumulation, and long - term return on investment (ROI) when buying cottage houses. The study employs annuity - based mortgage formulas, net present value (NPV) analysis, and amortization models to determine the optimal financing strategy for different income levels and repayment schedules. A comparative case study is conducted using fixed - rate and variable - rate mortgage schemes under different interest rate scenarios. The findings reveal that compound interest models significantly affect total payment amounts, while the annuity payment mrthod provides a more economically sustainable strategy for middle - income buyers. Additionally, a sensitivity analysis is performed to assess the impact of interest rate fluctuations and inflation on property affordability. This study  contributes to financial decision theory in real estate markets by providing a structured mathematical framework that assists investors, homeowners, and developers in making economically sound decisions when purchasing  cottage homes. The results emphasize the importance of precise mathematical calculations for reducing financial risks and optimizing long - term ownership planning.