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

To purchase a house in 5 years with a 20% down payment and 5% closing costs, you need to save $625 per month. Additionally, you need to save an extra $125 per month to cover the closing costs.

Step-by-step explanation:

To calculate the amount you need to save each month for a house purchase, you first need to determine the down payment and closing costs. For a house priced at $150,000, a 20% down payment would be $30,000. Adding the 5% closing costs, the total down payment would be $30,000 + $7,500 = $37,500.

Assuming you have 5 years to save, you would divide the total down payment by the number of months: $37,500 / 60 months = $625 per month.

To calculate the additional money needed to cover the 5% closing costs, you would multiply the house price by 5%: $150,000 * 0.05 = $7,500.

Then divide the additional amount by the number of months: $7,500 / 60 months = $125 per month.

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!!!}