Use the following information to answer the next two questions. (1) You plan to purchase...
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Use the following information to answer the next two questions.
(1) You plan to purchase your dream home in 10 years. Currently, it would cost you $500,000 to purchase the land and build the house to your specifications, but you believe this cost will grow by 3% per year. You have decided to place equal monthly payments into an investment account that earns 5% annually in order to make a 20% down payment on the home when you purchase it in 10 years. How much must you place into the account each month to make your down payment?
(2) Ten years has passed and you're ready to purchase the home. You will make a 20% down payment and finance the rest over 30 years at a 4% interest rate. Assuming that your mortgage requires monthly payments and that you take 30 years to pay off the loan, how much will you end up paying for the house? Round intermediate steps to four decimals.
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