To calculate how much you need to save each month for a house purchase in 9 years, we will break down the total costs into the down payment and the closing costs.
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Determine the down payment:
- The purchase price of the house is $175,800.
- The down payment is 20% of the purchase price.
- Down payment = 20% of $175,800 \[ \text{Down Payment} = 0.20 \times 175,800 = 35,160 \]
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Determine the closing costs:
- Closing costs are 7% of the purchase price.
- Closing costs = 7% of $175,800 \[ \text{Closing Costs} = 0.07 \times 175,800 = 12,306 \]
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Calculate the total amount needed:
- Total needed = Down payment + Closing costs \[ \text{Total Needed} = 35,160 + 12,306 = 47,466 \]
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Determine the monthly savings needed:
- You plan to save for a total of 9 years, which is equivalent to 9 × 12 months = 108 months.
- Monthly savings = Total needed / Number of months \[ \text{Monthly Savings} = \frac{47,466}{108} \approx 439.93 \]
Thus, you need to save approximately $439.93 each month to reach your goal.