Question

Using the information from Problem 24, if closing costs are 8.7%, how much additional money do you need to save per month to cover the additional expense?

Answer 1

[AI-generated answer — Bot GPT 3.5]

First, we need to calculate the closing costs based on the price of the home.

Closing costs = 8.7% of $225,000
Closing costs = 0.087 * $225,000
Closing costs = $19,575

Now, we need to determine how much additional money we need to save per month to cover the closing costs. If we assume a one-year savings period, we need to divide the closing costs by 12 months.

Additional money needed to save per month = $19,575 / 12
Additional money needed to save per month ≈ $1,631.25

Therefore, you would need to save an additional $1,631.25 per month to cover the 8.7% closing costs on a $225,000 home purchase.