W988AMMT.4
4.You're saving to buy a house. You figure that you will need $20,000 to cover closing costs and the down payment. Assume that you can earn 12%, compounded monthly. If you save $300 per month starting the month after graduation, in 8 years will you have enough money to buy the house? (6 pts.)
The next step is to figure out what the PV of 18,458.31 will be worth in 8 years:
--Plenty of money for the house.