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You and your new spouse each bring home $1600 each month after taxes and other payroll deductions
You and your new spouse each bring home $1600 each month after taxes and other payroll deductions. By living frugally, you intend to live on just one paycheck and save the other in a mutual fund yielding 7.84% compounded monthly. How long will it take to have enough for a 20% down payment on a $175,000 condo in the city?
Expert Solution
Computation of it will take to have enough for a 20% down payment on a $175,000 condo in the city using NPER Function in Excel:
=nper(rate,pmt,pv,-fv)
Here,
NPER = Number of Periods = ?
Rate = 7.84%/12 = 0.653% compounded monthly
PMT = $1,600 each month
PV = 0
FV = $175,000*20% = $35,000
Substituting the values in formula:
=nper(0.653%,1600,0,-35000)
NPER or Number of Periods = 20.51 months or 1.71 years
So, it will take 1.71 years to have enough for a 20% down payment on a $175,000 condo in the city
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