Albert Glover, star third baseman with the Blue Jays, is given a choice of contracts:

(a) 3,200,000 per year for the next five years, payable at the end of each year.

(b) 3,000,000 per year for the next five years, payable at the beginning of each year.

(c) 1,800,000 per year for the next ten years, payable at the end of each year.

If / = .04, find the value of each of these contracts at the beginning of the first year. Repeat for / = .06.

AppendixLO1