Question
Present value . Two rival football fans have made the following wager: if one fan's college football team wins the conference titleoutright, the other fan
Present
value.
Two rival football fans have made the following wager: if one fan's college football team wins the conference titleoutright, the other fan will donate $2,200 to the winning school. Both schools have had relatively unsuccessful teams, but are improving each season. If the two fans must put up their potential donation today and the discount rate is 9% for the funds,
what is the required upfront deposit if we expect a team to win the conference title in 4years?
what is the required upfront deposit if we expect a team to win the conference title in 12 years?
what is the required upfron depostit if we expect a teach to win the conference title in 18 years?
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