Question

You want to purchase a house in 5 years. You estimate it's cost as $150,000 and you want to make a 20% down payment how much do you need to save each month

Answer 1

The down payment is 20% of the house cost which is:

$150,000 x 0.20 = $30,000

You need to save $30,000 over a period of 5 years which is 60 months.

Therefore, the amount to save each month is:

$30,000 ÷ 60 = $500

You need to save $500 each month for 5 years to accumulate a down payment of $30,000 for the house purchase.

Answer 2

If you want to include closing cost of 5% with your down-payment how much additional money must you save per month

Answer 3

Closing costs are typically about 5% of the home's purchase price, so for this case, the closing cost would be 5% of $150,000, which is:

$150,000 x 0.05 = $7,500

To include the closing costs in your down payment, you need to save an additional $7,500. This is in addition to the $30,000 down payment, so the total amount you need to save is:

$30,000 + $7,500 = $37,500

You have 5 years or 60 months to save this amount. Therefore, the additional amount you must save per month is:

$7,500 ÷ 60 = $125

In addition to the $500 savings for the down payment, you need to save an extra $125 per month to account for the closing costs. Therefore, the total amount you need to save each month is $625 ($500 + $125).

Answer 4

Which is not a savings instrument

Savings account
Investment account
Certificate of Deposit
Checking account

Answer 5

A checking account is not a savings instrument. It's a financial account that is typically used for everyday transactions such as paying bills, making purchases, and withdrawing cash. While checking accounts may earn interest, it's usually lower than savings accounts and investment accounts. Savings accounts, investment accounts, and certificates of deposit are all savings instruments used for storing and growing money.