How is the Present Value of a Growing Annuity Derived?
The present value of a growing annuity is the sum of future cash flows. For a growing annuity, each cash flow increases at a certain rate.
...or it is equal to
64000 + 64000(1.08) + 64000(1.08)^2 + 64000(1.08)^3 + 64000(1.08)^4
64000 (1 + 1.08 + 1.08^2 + 1.08^3 + 1.08^4) = $ 375462.46
More info here:
http://financeformulas.net/Present_Value_of_Growing_Annuity.html
Here is a FUTURE VALUE calculation if you prefer: (to avoid confusion)
FV = P [(1+r)^n - (1+g)^n]/(r-g) same answer......
http://financeformulas.net/Future-Value-of-Growing-Annuity.html