you want to purchase a house in 10 years. you estimate the cost will be $184,500.00. you want to make a 20% down payment and closing costs, which are 8.5%. How much are the down payment and closing costs? How much do you need to save each month to reach your goal?
Amount of the down payment 184,500×0.2=36,900 Closing costs 184,500−36,900=147,600 Monthly payment Use the formula of the future value of annuity ordinary Fv=p [(1+r/k)^(kn)-1)÷(r/k)] Fv 147600 P payment per month ? R 0.085 K 12 N 10 years Solve for p P=147,600÷(((1+0.085÷12)^(12 ×10)−1)÷(0.085÷12)) =784.53 payment per month
