Dawn and Martin want to purchase a home in 4 years time. They currently have been looking at homes and are interested in one in the $450,000 range. They expect that real estate prices in their city will increase 5% p.a. They want to have a 10% down payment saved at the time of purchase.

Martin and Dawn were advised by an individual at the bank that they can invest in GICs and earn a return of 4% p.a. They both think it will be easier for them to achieve this savings goal if they "pay themselves first" and automatically set aside the money each pay period. They receive their pay cheques every two weeks.

1. questiion After two years of saving, new rules are introduced requiring a minimum of 15% down payment. How much do Dawn and Martin need to increase their savings by to still be able to purchase the house?