5

.n- u.- .- 232? Ifiriancarlo Stanton's $325 million mega-contract with Marlins was known to he the largest contract in sports history. The 13-year payout schedule looks like the following: 2015: $6.5 million 2016: $9 million 201?: $14.5 million 2013: $25 million 2019: $26 million 2020: $26 million 2021: $29 million 2022: $29 million 2023: $32 million 2024: $32 million 2025: $32 million 2026: $29 million 202?: $25 million plus $10 million buyout option. Note that the deal allows Stanton to opt out after the end of the 2020 World Series, but if he does, he leaves a substantial sum of money on the table by opting for free agency. In years 2015-20 he will earn $10\";Ir million of the $325 million deal, but in years 202126 where he would leave the Marlins, the salaries total $213 million would be foregone, or more than twice the sum of the early years in the contract. (a) With the salary paid at the beginning of each season, what is the worth of his contract at an interest rate of 6%? (b) Suppose he got another lucrative contract at the end of the 2020 season being a free agent valued at $210 million to be paid over 2 seasons ($30 mil- lion paid at the begitming of each season}. Is it worth being a free agent to take this offer at 6% interest