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Imagine your favorite ocean - front house on Munster Beach becomes available for sale. You currently have $ 5 0 , 0 0 0 of

Imagine your favorite ocean-front house on Munster Beach becomes available for sale. You currently have $50,000 of savings ready to go. Also, your monthly budget would allow to pay to $500 per month towards a 20-year mortgage on this house. Finally, you are guaranteed to win the lottery in 10 years from today, providing you with $100,000 at that time, and you can borrow against this money. Interest rates for any type of loan or investment sit at 5%, compounded semiannually.
What is the maximum price you could afford to buy this house?
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