Question

For questions 3–4, you will be answering by filling in the blanks.(1 point)
Round to the nearest penny.

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?

Answer 1

To determine how much you need to save each month for the down payment on a house costing $150,000, follow these steps:

1. **Calculate the down payment amount.**
\[
\text{Down payment} = \text{Cost of the house} \times \text{Percentage down payment}
\]
\[
\text{Down payment} = 150,000 \times 0.20 = 30,000
\]

2. **Determine how many months you have to save.**
Since you plan to buy the house in 5 years:
\[
\text{Months} = 5 \times 12 = 60 \text{ months}
\]

3. **Calculate how much you need to save each month.**
\[
\text{Monthly savings} = \frac{\text{Down payment}}{\text{Number of months}}
\]
\[
\text{Monthly savings} = \frac{30,000}{60} = 500
\]

Therefore, you need to save **$500.00** each month.