Suppose that you are now 21 and that you would like $4.75 million at age 65 to fund your retirement. You would like to save each year an amount that grows by 3% each year as you expect your salary will grow by 3% per year.
How much should you start saving if you start saving next year (i.e. your first deposit is on your 22nd birthday and your last deposit is on your 65th birthday - what must your first deposit be)? Assume that the interest rate is 7%.