Problem:
Assume that you would like to purchase a home in the next 5 years. Also assume that you have already saved $50,000 so far and the approximate cost of the house is $250,000. Calculate how much you need to save for the next five years to purchase this home and put down 20% as a down payment. Using the following Web site:
https://www.proteam-corvette.com/1967.html
Base the interest rate on the 5-year interest rate from the Treasury department:
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Q1. Calculate the required yearly savings on $50,000.
Q2. How much money could be made using the same interest rate with the amount of yearly cash flows that would have been saved for the investment if these amounts had been invested instead?
Q3. Which is the best option? Why?