Risk and Return

700-1,000 words- original work with APA format-

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 downpayment. Using the following Web site: http://www.proteam-corvette.com/1967.html

Base the interest rate on the 5-year interest rate from the Treasury department: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield 

• Calculate the required yearly savings on $50,000.
• 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?
• Which is the best option? Why?