Anticipated Balance
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Definition of 'Anticipated Balance'The amount that a savings account will have at some future date, or that a time deposit will have at maturity, assuming no withdrawals or additional deposits occur. In broad terms, anticipated balance means the net balance in any account at a future point in time. Calculation of the anticipated balance assumes compound interest, rather than simple interest. |
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Investopedia explains 'Anticipated Balance'Anticipated balances are important in the context of financial planning. For example, consider a couple that wants to save $20,000 over the next four years as the down payment for a house.They currently have $10,000 in savings, and to achieve their dream of becoming homeowners, would like to know approximately how much they should save per year in a time deposit, in order to reach their target of an anticipated balance of $20,000 in four years. Assuming a compound interest rate on deposits of 3% per annum, they would need to save $2,390 per year. |
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