Question

Pat is saving $425 per month for a down payment on her first house. The house she wants sells for $95,000 and the lender requires 5% down. How long will Pat have to save before she has enough for the down payment?
12 months

Answer 1

Pat would have to save for 118 months or approximately 9.8 years for her to be able to buy the house that she wants at $95,000. The computation are as follows: 

$95,000 X 0.5 (% on 1st down payment) = $47,500 
$95,000 - $47,500 = $50,000 (Pat's 1st down payment) 

To compute for how long she could save for $50,000:
$50,000 / $425 = 117.64 or 118 months