To determine how much you need to save each month for a house, follow these steps:
Step 1: Calculate the down payment.
The estimated cost of the house is $150,000, and you want to make a 20% down payment.
\[ \text{Down Payment} = \text{Cost of House} \times \text{Down Payment Percentage} \] \[ \text{Down Payment} = 150,000 \times 0.20 = 30,000 \]
Step 2: Determine the total amount to save.
Since you want to save for 5 years (or 60 months), we need to calculate how much you need to save each month to reach your down payment goal.
Step 3: Calculate monthly savings.
To find out how much you need to save each month, divide the total down payment amount by the number of months.
\[ \text{Monthly Savings} = \frac{\text{Down Payment}}{\text{Number of Months}} \] \[ \text{Monthly Savings} = \frac{30,000}{60} = 500 \]
Conclusion
You need to save $500 each month to make a 20% down payment on the estimated cost of the house in 5 years.