Saving for the down payment


Problem:

You want to buy a house within 3 years, and you are currently saving for the down payment. You plan to save $3,000 at the end of the first year, and you anticipate that your annual savings will increase by 10% annually thereafter. Your expected annual return is 8%. How much would you have for a down payment at the end of Year 3?

Note: Explain all calculation and formulas.

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Accounting Basics: Saving for the down payment
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