The Bears are going to trade for Russell Wilson and sign him to a new 6 year contract. He gets $15 million today. Then, he gets $20 million at the end of years 1 through 6. At the end of 6 years, he gets an additional $35.768 million payment. Assume a discount rate of 8% and annual compounding. What is the PV of his contract?
The Bears are going to trade for Russell Wilson and sign him to a new 6 year contract. He gets $15 million today. Then, he gets $20 million at the end of years 1 through 6. At the end of 6 years, he gets an additional $35.768 million payment. Assume a discount rate of 8% and annual compounding. What is the PV of his contract?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 22P
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The Bears are going to trade for Russell Wilson and sign him to a new 6 year contract. He gets $15 million today. Then, he gets $20 million at the end of years 1 through 6. At the end of 6 years, he gets an additional $35.768 million payment. Assume a discount rate of 8% and annual compounding. What is the PV of his contract?
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