You want to buy a house in 9 years. The estimated cost is $175,800.00. You want to make a 20% down payment and closing costs are 7%. How much in totality do you need to save each month to reach your goal if you cover closing costs and the down payment? Round any decimals to the nearest penny.
First, calculate the total amount needed for the down payment and closing costs:
Down payment = $175,800.00 x 20% = $35,160.00
Closing costs = $175,800.00 x 7% = $12,306.00
Total down payment and closing costs = $35,160.00 + $12,306.00 = $47,466.00
Now, calculate the total amount needed for the house after the down payment:
Total cost of the house = $175,800.00 - $35,160.00 = $140,640.00
You need to save $47,466.00 in 9 years. So, to find out how much you need to save each month:
Monthly savings = $47,466.00 / (9 years x 12 months) = $47,466.00 / 108 = $439.50
Therefore, you need to save $439.50 each month to reach your goal in 9 years, covering the down payment and closing costs.