FV with a Increasing Payment

I ran into a problem with FV. I don't want the annual payment to stay the same, I want it to increase by $500 every year. What formula would I have to use?

Interest 8.00%
Years 38
Deposit $5,000.00
Starting Balance $2,500.00
Future Value $1,236,269.29

Every year the deposit increases by $500. So in year 38 the deposit would be $23,500.00.

Year#Year Amount
1 2008 $5,000.00
2 2009 $5,500.00
3 2010 $6,000.00
4 2011 $6,500.00
5 2012 $7,000.00
6 2013 $7,500.00
7 2014 $8,000.00
8 2015 $8,500.00
9 2016 $9,000.00
10 2017 $9,500.00
11 2018 $10,000.00
12 2019 $10,500.00
13 2020 $11,000.00
14 2021 $11,500.00
15 2022 $12,000.00
16 2023 $12,500.00
17 2024 $13,000.00
18 2025 $13,500.00
19 2026 $14,000.00
20 2027 $14,500.00
21 2028 $15,000.00
22 2029 $15,500.00
23 2030 $16,000.00
24 2031 $16,500.00
25 2032 $17,000.00
26 2033 $17,500.00
27 2034 $18,000.00
28 2035 $18,500.00
29 2036 $19,000.00
30 2037 $19,500.00
31 2038 $20,000.00
32 2039 $20,500.00
33 2040 $21,000.00
34 2041 $21,500.00
35 2042 $22,000.00
36 2043 $22,500.00
37 2044 $23,000.00
38 2045 $23,500.00

1.08^(39-ROW($A$1:$A$38)))

can you explain how this part works. why is it 1.08? is there anyway to add a starting balance.