Question

A professional baseball player is considering between two different contracts. The first contract will pay him $24 million annually for a total of 8 years. The second contract will also pay the player for 8 years, but the player arranges for the following payment structure: $24.6 million annually in years 1-3 $7.69 million annually in years 4-7 $3.73 million annually in years 8-14 Assume the player will deposit everything that he earns into an account that earns 3% interest, compounded annually. Which contract will result in the most amount of money for the player at the end of 14 years? Enter your answer in terms of millions of dollars. For example, if the answer is $12.3 million, enter 12.3."

Answer 1

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