Part 2 Buying the house 0 The car down payment will come from their bank account, and whatever is left will stay in the checking account as a cash reserve. 0 After all their other monthly expenses, G&M have a net positive cash flow of $1500 per month. They will make the monthly car payment, insurance payments, gas and oil payments from their cash flow of $1500. Their current apartment rent does not come from this amount. Any excess cash (from the $1500) each month will go into a long term savings plan for 4 years that pays an APR of 5.5% compounded monthly 0 At the end of the four years, they will keep the car if they have bought it, or return the car to the dealership if they have leased it. They will cash out the long term savings plan, put the amount of their original car down payment back in checking (from their long-term savings) so they can shop for a new car if they leased the car or save it to shop for a new car later if they bought the car. 0 The remaining long term savings plan balance they will use as a down payment on a new house, which they expect to be 15% of the house's price. Calculate: 1. Total funds in the long term savings plan after 4 years, 2. Funds available for a down payment on a house, 3. Highest house price they can afford, and 4. Monthly payment for a 30-year mortgage at 3.5% APR for this highest option. You do not need to worry about the $1500 used to determine what could be put into a long term savings plan when computing the highest house price they could afford. Their past rent was not part of the $1500