Answer? You're a 30-year-old professional earning $75,000annually and you're considering buying your firsthome in a mid-sized city. The average home price inyour target neighborhood is $300,000, and you'vemanaged to save $30,000 for a down payment. Yourmonthly expenses, including rent, currently total$2,500, and you have $10,000 in student loan debt at5% interest, with minimum monthly payments of$200. Your credit score is 720, and you've been pre-approved for a 30-year fixed-rate mortgage at 4.5%interest. You're torn between buying a home now orcontinuing to rent while saving more and payingdown your student debt. Given your financialsituation, current market conditions, and long-termfinancial goals, should you proceed with buying ahome or continue renting?

Step 1: Monthly Income: Annual income: $75,000 Monthly income (before taxes): $75,000 / 12 = $6,250…

Answered: You're a 30-year-old professional…

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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1
You are trying to save up for a downpayment on a home and you need $55, 000 to cover closing costs and the down payment. You can save $975 per month for the house and put it in your savings account that has a 7.65% interest rate with monthly compounding. How many months of these deposits are necessary before the account hits $55, 000.

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