Question

For retirement, you decide to deposit $718 at the end of each year and you will increase your deposit by $213 per year. How much will you have at the end of 20 years if the bank pays 2.5% compounded annually?

Answer 1

Future worth (FW) is computed at end of 20 years is computed as follows. Note that

FV factor at year N = (1.025)20^-N

Year	Deposit ($)	FV Factor @2.5%	Compounded Deposit ($)
	(A)	(B)	(A) x (B)
1	718	1.5987	1147.83
2	931	1.5597	1452.04
3	1144	1.5216	1740.73
4	1357	1.4845	2014.47
5	1570	1.4483	2273.83
6	1783	1.4130	2519.33
7	1996	1.3785	2751.51
8	2209	1.3449	2970.86
9	2422	1.3121	3177.87
10	2635	1.2801	3373.02
11	2848	1.2489	3556.76
12	3061	1.2184	3729.53
13	3274	1.1887	3891.76
14	3487	1.1597	4043.85
15	3700	1.1314	4186.21
16	3913	1.1038	4319.22
17	4126	1.0769	4443.25
18	4339	1.0506	4558.66
19	4552	1.0250	4665.80
20	4765	1.0000	4765.00
		FW ($) =	65,581.55