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A creative general manager has offered two different contracts to a vain quarterback. The contracts are shown below: CONTACT A CONTRACT B YEAR SALARY YEAR

A creative general manager has offered two different contracts to a vain quarterback. The contracts are shown below:

CONTACT A CONTRACT B
YEAR SALARY YEAR SALARY
0 $506,500.00 0 $306,475.00
1 $506,500.00 1 $306,475.00
2 $506,500.00 2 $809,550.00
3 $506,500.00 3 $809,550.00
4 $506,500.00 4 $809,550.00

The newspapers report the total dollars of the contract, so contract A will pay a total of $2,532,500.00, while contract B will pay $3,041,600.00. The player will select contract B as it has more publicity. The team can earn 8.00% on their investments, so let's determine the value of each contract.

What is the present value of contract B?

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