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Akira just graduated from university. He plans to work for 5 years and then study a PhD degree. He figures he can save $5000 in the first year and will be able to save 10% more than the previous year in each of the next 4 years. His saving account pays an interest rate of 6.6% p.a. and the interests are compounded annually.
Problem a) How much will Akira saving account be able to accumulate 5 years later?
Problem b) If he also puts his parents' graduation gift of $3000 into his saving account at the beginning of the 5 years, what will be his total saving account balance 5 years later?
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