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A charity sets up a trust fund with an initial investment. It pledges to invest 0 . 8 m at the end of each year.

A charity sets up a trust fund with an initial investment. It pledges to invest 0.8m at the end of
each year. The fund is invested at an annual interest rate of 5% which is added at the end of each
year.
(i) Find the first order difference equation for the value of the fund (Vt) at the end of year t.
(ii) Find the general solution to the difference equation in terms of the initial investment, Xm. Use the
general solution to find the value of X which will ensure the fund is worth at least 15m at the end of the
10th year.
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