Maggie wins the lottery and is awarded 500000 at the


Maggie wins the lottery and is awarded 500,000 at the beginning of each quarter for the next 20 years. The government takes 40% of her winnings and she spends 90% of what is left. The remainder is put into a special account with an insurance company that guarantees 7% compounded monthly for the first 10 years and 4% compounded 6 times a year for the following 10 years. At the end of 20 years the accumulated value in the account is used to purchase a perpetuity-immediate with semi-annual payments of X

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Financial Management: Maggie wins the lottery and is awarded 500000 at the
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