You have decided to buy a new house 3 years from now. The current price of the house is $165,000.64, and the price is expected to rise by 2% per year until you are ready to buy it. The bank is requiring a 20% down payment, and closing costs will be 5% of the amount borrowed. Assuming you are starting with no money, how much will you need to save each month to be able to obtain the mortgage 3 years from now? Assume you will be able to achieve an annual return of 5% on your savings.

Multiple Choice

• $438.50

• $1129.58

• $1084.40

• $1104.72

• $4518.32