Question

I'd like to buy a property. Right now, I have $20,000 in my savings account that will grow at a rate of 2% monthly. I am planning to save an additional $300 monthly and that will a grow at 2% per month. How large of a down payment will I be able to afford five years from now?

Answer 1

FV of annuity
The formula for the future value of an ordinary annuity, as opposed to an annuity due, is as follows:
P = PMT x ((((1 + r) ^ n) - 1) / i)
Where:
P = the future value of an annuity stream
PMT = the dollar amount of each annuity payment
r = the effective interest rate (also known as the discount rate)
i=nominal Interest rate
n = the number of periods in which payments will be made
Monthly deposit	300
Interest	2%
No	60
FV=	300*((((1 + 2%) ^ 60) - 1) / 2%)
FV=	34,215.46
Initial Investment	20000
Amount after 5 years	=20000*(1+2%)^60
Amount after 5 years	65,620.62
Total Accumulataion	99,836.08