Assume in 2007, an athelete signed a contract reported to be worth $283 million.

Question

Assume in 2007, an athelete signed a contract reported to be worth $283 million. The contract called for $4.00 million immediately and $35 million in 2008. The remaining $244.00 million was to be paid as $25 million in 2009, $25 million in 2010, $24 million in 2011, $22 million in 2012, $40 million in 2013, $33 million in 2014, $29 million in 2015, $28 million in 2016 and $18.00 million in 2017. If the appropriate interest rate is 8 percent, what kind of deal did the athelete snag? Assume all payments other than the first $4.00 million are paid at the end of the year.

Explanation / Answer

PV= 4+(35/1.08)+(25/1.08^2)+(25/1.08^3)+(24//1.08^4)+(22/1.08^5)+(40/1.08^6)+(33//1.08^7)+(29/1.08^8)+(28/1.08^9)+(18//1.08^10) =$192.77

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.