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Jane plans to buy a house in 10 years. The house she dreams about costs about...

Jane plans to buy a house in 10 years. The house she dreams about costs about $150,000 today. The cost of houses increases at 2.5% per year.

How much will the house cost in ten years?

Jane currently has $75,000 that she can invest to earn 3% interest over the next ten years.

How much will Jane accumulate from her investment of 75,000 Dollars in ten Years?

How much additional money would Jane need in ten years? In effect, how much money does Jane need to borrow to purchase her house?

Prepare an amortization table to pay off Jane’s mortgage, if she can borrow at an annual rate of 6.5% to pay off the mortgage quarterly in 5 years after buying the house.

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Answer #1

M Ans- Costof Housetoday $ ,5q006 Tmcrease 2.5 /Yea Hlouse Cost im lo Yea s 50p00 CIt.025 House Cost i =193,013 10 Years Savi

91219 payment
YEAR 1 Q1 1482.309 92701.31 5378.92 87322.39
Q2 1418.989 88741.38 5378.92 83362.46
Q3 1354.64 84717.1 5378.92 79338.18
Q4 1289.245 80627.42 5378.92 75248.5
YEAR 2 Q1 1222.788 76471.29 5378.92 71092.37
Q2 1155.251 72247.62 5378.92 66868.7
Q3 1086.616 67955.32 5378.92 62576.4
Q4 1016.866 63593.26 5378.92 58214.34
YEAR 3 Q1 945.9831 59160.33 5378.92 53781.41
Q2 873.9479 54655.36 5378.92 49276.44
Q3 800.7421 50077.18 5378.92 44698.26
Q4 726.3467 45424.6 5378.92 40045.68
YEAR 4 Q1 650.7424 40696.43 5378.92 35317.51
Q2 573.9095 35891.42 5378.92 30512.5
Q3 495.8281 31008.32 5378.92 25629.4
Q4 416.4778 26045.88 5378.92 20666.96
YEAR 5 Q1 335.8381 21002.8 5378.92 15623.88
Q2 253.8881 15877.77 5378.92 10498.85
Q3 170.6063 10669.45 5378.92 5290.535
Q4 85.97119 5376.506 5376.506 0.000187
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