1. Verify, with your own calculations, the annual payment of $1,193,248.20 to be paid to Bobby Bonilla from July 1, 2011 through July 1, 2035. Show your work. (Hint: its a two step process using two of the formula covered in Unit 1.)

2. Rovell suggests that Bonilla could have accumulated $16.5 million by December, 2015, had he taken the $5.9 million in 2000 and invested it in a 60%/40% stock/bond portfolio, rebalanced each year. Novell writes, Going back historically, we learn that Bonilla would have aggregated $16.5 million by December 2015. Through the deal the Mets gave him, he collected only $5.9 million by December 2015. Looking at it that way, it doesn't look like Bonilla got the steal of the century.

Do you agree with this view? Is it fair to compare the $16.5 million to the $5.9 million actually received through 2015 or is there another (better) valuation for the latter? (Hint: what about the value at December, 2015 of the remaining 20 years of annual $1,193,248.20 payments?) To summarize:

For Question 1, verify the calculation of the annual $1,193,248.20 payment, and

• For Question 2, find a better valuation of Bonillas annuity as of December, 2015 to compare with Rovells estimate. For simplicity, find a value as of July 1, 2015 (instead of December, 2015) so you dont have to hassle with fractional years.