Actual Proposals In his senior year at a major midwestern university, Billy Wils

Question

Actual Proposals
In his senior year at a major midwestern university, Billy Wilson had been the third runnerup for the fabled Heismann Trophy. The trophy goes to the outstanding football player in America and is presented annually by the New York Athletic Club. During the past football season, Wilson had run for over 1,500 yards and scored 18 touchdowns. He had also caught 41 passes coming out of the backfield. His time in running the 40-yard dash, which professional scouts consider to be extremely important, was 4.38 seconds. He was voted first team All American by the Associated Press and was a second team All American in the Coaches Poll selections.
On Monday morning, his agent, Joel Weinberg, called to say that he was looking at three different proposals that a major West Coast professional football team had made for Billy Wilson

Explanation / Answer

As per the question says the monitory values of three proposals are calculated below (Assumption is 5% interest per anum and ~ denotes figure is rounded off )- Offer 1: After 5 yrs the money would be worth of- =$(((((9?1.05+8.5)?1.05+8.5)?1.05+8.5)?1.05+8.5)?1.05+8.5)?1.05 which is equal to ~$ 5,846,000. ~ Offer 2: Working similarly calculated it for first 5 years, this is equal to ~$ 857,800. Offer 3: This one is quite large (amounts are ten times of offer 2). Its value is ~$ 7,172,000 after first four years and after 5 years it is ~$ 7,530,000. ~ Thus value of all the offers is calculated for equal amount of time and obviously offer 3 over rules others.

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