Harry Hurler has been playing baseball since he was five years old and has always dreamed of playing in the big leagues. Last season, he was a starting pitcher for a double-A (AA)-level baseball team, the Dodge City Cowboys; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 96 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 16-3 winloss record, an earned run average (ERA) of 2.98, and 146 strikeouts in 117.0 innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Harry received the following email from his agent, Noah Never-Enough, indicating that he is being called up to the Mobile Bayhoppers, the Cowboyss corresponding Major League Baseball (MLB) team. Moreover, Harrys contract is being revised to reflect his new status. The email describes the general terms and conditions of Harrys revised contract. From: Noah Never-Enough To: Harry Hurler Subject: New Team, New Contract Proposal Harry, Congratulations! Youve been called up to the Mobile Bayhoppers. Below are the offered terms and conditions of your new contract. After you review them and think about the offer, call me and well discuss your options. Congrats again! Salary and Incentives: Harry Hurler hereafter referred to as the Player, is offered a four-year contract with an annual salary of $444,000 per year, to be paid at the end of each month in the contract term. Under the leagues collective bargaining agreement, the Player will receive a 4% cost-of-living adjustment (COLA) to his annual salary at the beginning of every other year. This means that the Players annual salary will increase at the beginning of year 2 and year 4, as applicable. In addition, the Player will receive a one-time $20,000 time-in-league bonus after six months of participation with an MLB team. This bonus will be paid immediately on completion of the six-month period. The Player is offered a performance-based bonus, as well as a milestone bonus. Both are intended to encourage outstanding performance. The Player is offered the following award-based performance incentive: a 15% bonus payable at the end of the operating year if he is selected to play in the All-Star game. The Player is also offered the following milestone bonus: a $100,000 bonus if he ties Nolan Ryans 1973 single-season strikeout record (383 strikeouts). The Player is eligible for each potential bonus each year that the contract is in effect and, if expressed as a percentage, will be based on the value of the Players base annual salary for the corresponding year. If earned, the performance and milestone bonuses will be distributed in a single payment at the beginning of the next contract year. Although this proposal describes only one milestone, the actual contract contains several progressive milestones. Exceeding one milestone creates the opportunity to exceed another. In addition to the proposal offered by the Bayhoppers, Ive also been able to secure the following endorsement opportunity: A local car dealer has offered you a contract that will pay $750 per month for two years. This contract is contingent on your accepting the contract with the Bayhoppers and will take effect immediately upon signing your MLB contract. In return for these payments, you will participate in the dealers promotional events, such as signing autographs and allowing photographs as requested. Ive also attached a worksheet that you can use to analyze the deal. Im in negotiations for the rest of the day, so lets discuss your thoughts on the contract proposal tomorrow. Im proud of you! Take care, Noah Noah Never-Enough Sports Agent, R&R Talent Management Inc. | Mobile Harry is so excited! According to Noah, the contract is worth $2,522,400assuming receipt of all possible bonuses. After rereading the email twice and calling his family, Harry called you to review the terms of the contract and verify Noahs calculations. After an extended conversation about what hell do with his newfound wealth, you and Harry have agreed that any funds received could be invested to earn 7.50%, compounded monthly