Question
A pro-football team offers one of its players the choice between the following contracts: (a) a yearly salary (payable at the end of every year)
A pro-football team offers one of its players the choice between the following contracts:
(a) a yearly salary (payable at the end of every year) of $400,000 for 5 years;
(b) a quarterly salary (payable at the end of eery quarter) of $95,000 for 5 years;
(c) a monthly salary (payable at the beginning of every month) of $31,000 for 5 years;
(d) a five yar contract with a lump sum slary of $1.5 million payable now.
Assuming an annual percentage rate of 8% compounded semi-annually, which contract should this player accept? Show all you calculations.
I know that there are many formulas in this process (for all.). But please show me the process in detail. I really really need you help.
Thank you so much!
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