You started to save for your retirement by setting up your personal retirement plan at age 25. You deposited an initial payment, P at the end first year and increased that amount in subsequent years by 3% inflation rate. You earned 5% APR interest on your account and continued for 40 years until your retirement. At your retirement, you had saved $377,795.09. What was the initial deposit that you started with? Need some help on this one. Thank you.
+37158 Initial Payment = FV [ (r-g) / ( 1+r)^n - (1+g)^n) ] r = .05 g = .03 n = 40 FV = 377795.09
= 1999.999 ~~~ $2000.
+37158 Initial Payment = FV [ (r-g) / ( 1+r)^n - (1+g)^n) ] r = .05 g = .03 n = 40 FV = 377795.09
= 1999.999 ~~~ $2000.
