Question

if you want to purchase a house in 5 years. you estimate its cost as 150,000 and you want to make a 20% down payment. how much do you need to save each month?




if you want to include closing costs of 5% with your down payment, how much additional money must you save per month?

Answer 1

Answer:

money to be saved each month in five years. Is 2000

If additional cost is added, you'll save extra 6000. I.e saving 100 per month.

Step-by-step explanation:

Let's get the value of the down payment first.

20% of 150000 =30000

So the remaining amount to be saved up to is 150000-30000= 120000.

This money is to be saved in 5 years monthly.

12 months in a year

12*5 =60 months on 5 years

So to know the actual money to be saved each month in five years.

120000/60= 2000

5% of 2000 = 100

100*60 = 6000

You'll save additional 6000 if closing costs is added

Answer 2

Answer: You need to save $500.00 a month

And an additional $125.00 for closing costs

1. $500.00

2.$125.00

Step-by-step explanation:

First find out how much you need to save in total

1. ($150,000)(.20)= $30,000

We need to save $30,000 for the down pay

Since there are 60 months in 5 years, we divide the $30,000 so we can split the cost!!

2. $30,000 ÷ 60 = $500

Each month we have to save $500 dollars to reach our goal of $150,000 in 5 years!

(Check your math)

$500×12(months in 1 year)= $6,000

$6,000×5(5 years to save)= $30,000!

For the second,

Closing costs are just your percentage multiplied by your total!!

1. ($150,000)(0.05)= $7,500

Now we divide it into 60, since like we mentioned above, there are 60 months in 5 years!

2. $7,000 ÷ $125.00

Each month we have to save an additional $125.00 each month when including closing costs!!

{Remember that to calculate the down payment to always move the decimal point twice to the left!! This will help you remember how to find the closing cost easier!!!}