a. Assuming that property prices are not expected to grow in the medium term, how much money will she need to put into her bank account per year over the next 7 years to afford the recommended deposit and stamp duty for an average house in Samilan? Assume that she currently has a bank account balance of $57,000, savings account interest rates will remain stable at 2.0%, and interest is compounded daily. Assume an additional Stamp duty cost of 4% of the property value upon purchase. Stamp duty in this case must be paid for with her own savings and cannot be borrowed.
a. Assuming that property prices are not expected to grow in the medium term, how much money will she need to put into her bank account per year over the next 7 years to afford the recommended deposit and stamp duty for an average house in Samilan? Assume that she currently has a bank account balance of $57,000, savings account interest rates will remain stable at 2.0%, and interest is compounded daily. Assume an additional Stamp duty cost of 4% of the property value upon purchase. Stamp duty in this case must be paid for with her own savings and cannot be borrowed.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Marlene is 29 years old, and would like to save a deposit to buy her first home in Samilan by the age
of 36. The average house price in this area is expected to be $380,000, with a recommended deposit
of 20% when financing a purchase.
a. Assuming that property prices are not expected to grow in the medium term, how much money
will she need to put into her bank account per year over the next 7 years to afford the
recommended deposit and stamp duty for an average house in Samilan? Assume that she
currently has a bank account balance of $57,000, savings account interest rates will remain
stable at 2.0%, and interest is compounded daily. Assume an additional Stamp duty cost of 4%
of the property value upon purchase. Stamp duty in this case must be paid for with her own
savings and cannot be borrowed.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F067dbd40-f2b3-427d-97e3-8cd3985fc1eb%2F71e5077f-9115-4c14-b07e-f4c71b29e93c%2F1sbnc7l_processed.png&w=3840&q=75)
Transcribed Image Text:Marlene is 29 years old, and would like to save a deposit to buy her first home in Samilan by the age
of 36. The average house price in this area is expected to be $380,000, with a recommended deposit
of 20% when financing a purchase.
a. Assuming that property prices are not expected to grow in the medium term, how much money
will she need to put into her bank account per year over the next 7 years to afford the
recommended deposit and stamp duty for an average house in Samilan? Assume that she
currently has a bank account balance of $57,000, savings account interest rates will remain
stable at 2.0%, and interest is compounded daily. Assume an additional Stamp duty cost of 4%
of the property value upon purchase. Stamp duty in this case must be paid for with her own
savings and cannot be borrowed.
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