Problem:
You anticipate that you will need $4,000,000 when you retire 40 years from now. You plan to make 40 deposits, beginning today, in a bank account that will pay 7% interest, compounded annually. You expect to receive annual raises of 2%, so you will increase the amount you deposit each year by 2%. (That is, your 2nd deposit will be 2% greater than your first; the 3rd will be 2% greater than the 2nd, etc.) How much must your 1st deposit be if you are to meet your goal? Please explain in detail and also provide step by step solution of each question.