Anticipated Balance

Think about anticipated balances like those old story problems in math class, the ones where two trains leave opposing stations headed toward each other and you have to figure out where they will meet (presumably in a fiery derailment, resulting in dozens, if not hundreds, of horrendous casualties...though your math teacher never wanted to talk about that and eventually stopped calling on you).

Anticipated balances use predictable rates, along with a little math, to figure out where your bank account will be at some point in the future, much like those doomed, hypothetical trains.

The anticipated balance is the balance that an account will have at some point in the future, assuming no additional withdrawals or deposits occur. It includes the amount in the account, plus any compounded interest accumulated over the time in question. It can also include specific regular deposits, if that makes sense for the particular situation.

So you are putting money away to buy one of those tiny homes you saw on TV. You need $13,000. You have $3,000 and access to an account earning 2% a year. Using anticipated balances, you can determine how much you would need to save each month in order to get the house of your tiny dreams. (Want to know the answer? Get a calculator and figure it out. We're not your math teacher; you're on your own.)