Assumindo pelo menos o SQL Server 2005 para o CTE recursivo:
;with cteCalculation as (
select t.Id, t.Date, t.Column1, t.Column1 as Column2
from YourTable t
where t.Id = 1
union all
select t.Id, t.Date, t.Column1, (1+t.Column1)*(1+c.Column2) as Column2
from YourTable t
inner join cteCalculation c
on t.Id-1 = c.id
)
select c.Id, c.Date, c.Column1, c.Column2
from cteCalculation c