finance

  700-800 words with references and citations

 

Assume that you would like to purchase a home in the next 15 years. Also assume that you have already saved $50,000 so far and the approximate cost of the house is 250,000. Calculate how much you need to save for the next five years to purchase this home and put 20% as a down payment.

 

   Based on the interest rate on a five year interest rate from the Treasury department: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield.

 

    Calculate the required yearly savings on $50,000.

 

    How much money could be made using the same interest rate with the amount of yearly cash flows which would have been saved for the investment if these amounts had been invested instead?

 

     Which is the best option? Why?