The four actors below have just signed a contract to star in a dramatic movie ab

Question

The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms:

Assuming an annual discount rate of 9%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.Round your answers to 2 decimal places.)

Which of the four actors is actually being paid the most?

The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms:

Explanation / Answer

PV of amount paid to Derek = $600,000 / 1.092 = $505,008.00

PV of amount paid to Isabel = $640,000 / 1.093 = $494,197.43

PV of amount paid to Meredith = $500,000.00

PV of amount paid to George = $500,000 / 1.09 = $458,715.60

So, Derek is being paid the most.

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