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Charlie has won the lottery and he just turned 1 4 years old ( today is his birthday ) . However, by law the lottery
Charlie has won the lottery and he just turned years old today is his birthday However,
by law the lottery is not allowed to pay out money until a person is at least years old.
Nevertheless, in the meantime, the winnings can be invested in an interest earning trust fund.
Charlie hires a consultant to define the investment strategy and this financial consultant
recommends that Charlie should invest the money in an equity fund, which is expected to
generate an annual effective return for Charlie.
The consultant is charging Charlie a onetime fee of the total winnings, payable
immediately when Charlie is before the remainder of the money is invested in the trust.
Charlie is told he can expect to receive payouts of $ from the trust each month, with the
first payment being made on his th birthday. Additionally, the payments will increase with
inflation annually, by So there are equal payments in year of $ starting when
Charlie turns the next equal payments are of $ starting when Charlie turns
year payments are
and so onPAYMENTS ARE MADE MONTHLY,
BUT THEY INCREASE IN VALUE ONLY ONCE A YEAR...
Charlie has won enough money for this payment scheme to last for exactly years, so he will
receive the last payment exactly one month before his rd birthday.
How much did Charlie win in the lottery, how much does the consultant receive and how much
gets invested in the trust fund??
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