You are interested in saving money for your first house. Your plan is to make regular deposits into a brokerage account which will earn 14 percent. Your first deposit of $5,000 will be made today (January 1st). You also plan to make four additional deposits at the beginning of each of the next four years. Your plan is to increase your deposits by 10 percent a year. (that is your plan is to deposit $5,500 at t+1, and $6,050 at t+2, etc.) How much money will be in your account after five years?
The solution explains how to calculate the amount of money in the account at the end of 5 years. Calculations are provided in an attached Excel file.