Calculating Annuity Values An All-Pro defensive lineman is in contract negotiations. The team has offered the following salary structure:
Time | Salary |
0 | $7,500,000 |
1 | 4,200,000 |
2 | 5,100,000 |
3 | 5,900,000 |
4 | 6,800,000 |
5 | 7,400,000 |
6 | 8,100,000 |
All salaries are to be paid in a lump sum. The player has asked you as his agent to renegotiate the terms. He wants a $9 million signing bonus payable today and a contract value increase of $750,000. He also wants an equal salary paid every three months, with the first paycheck three months from now. If the interest rate is 5 percent compounded daily, what is the amount of his quarterly check? Assume 365 days in a year.
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