8) How large would your salary have to be at the time you bought the house so th

Question

8) How large would your salary have to be at the time you bought the house so that the payment $5462.99 would equal 25% of that salary? Remember a rule of thumb, your house payments should not exceed 25% of your gross pay.$42,542.72

9) what is the total amount you would pay for this house over the 20-year mortgage with monthly payments? Don't forget to include the doan paymant.

10) How much less will this house cost you if you pay for it over 20-years instead of 30?

11) How much will you have to save each month during the first five years of your working life in order to have the necessary down payment? Assume you are investing in a certifcate of deposit earning 6% compounded monthly.

Explanation / Answer

8. The payment of $5,462.99 will be 25% of the salary, if the salary is $21,851.96 ($5,462.99 / 25%).

9. The total amount that would be paid for the house over the 20-year mortgage should be computed by multiplying $5,462.99 by 20 and then adding the amount of downpayment.

Amount paid for the house over the 20-year mortgage = ($5,462.99 x 20) + downpayment

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