Reference no: EM132336932

Background: You will be graduating in three months. You have already landed a job - way to go! Your new job, in the design and construction industry, pays $60,000 per year. With your good credit, after talking with a mortgage advisor, you realize you would qualify for a $325,000 home. But hold on, there is more good news. Congratulations! You just received an inheritance from an unknown relative for $30,000. What will you do with it?

For this assignment the objective is to make the most of this inheritance over a five year period. Here are the only have two choices for this assignment:

1. Rent and take the $30,000 and invest it with the goal of using the earnings to buy a house in 5 years.

2. Take the $30,000 to use as a down payment on a house.

Stipulations:

A. You must find a house in San Diego using Zillow or some other house real estate finder.

B. Your monthly take home from employment is $3,750 per month after taxes. (Remember you need to buy food, gas, and other necessity items).

C. Your monthly mortgage will be $2,300.

D. Assume that a house will appreciate at the rate of 8%

What will you do? Will you be better off investing the money and then buying a house in 5 years (remember same price house will have appreciated 8% per year) or buying the house now. Provide details of your choice and logic. If you decide to buy a house now please show your financials in 5 years.