A local newspaper headline blared, “Shawn Smith Signed for $30 Million.” A reading of the article revealed that on April 1,2009. Shawn Smith, the former record breaking center from Hockey University, signed a $30 million package with the Edmonton Ice Knights. The terms of the contract were $3 million immediately, $2.4 million per year for the first five years (with the first payment after one year), and $3 million per year for the next five years (with the first payment at year 6). If Shawn’s interest is 8% per year, what would his contract be worth at the time he signs it?
A local newspaper headline blared, “Shawn Smith Signed for $30 Million.” A reading of the article revealed that on April 1,2009. Shawn Smith, the former record breaking center from Hockey University, signed a $30 million package with the Edmonton Ice Knights. The terms of the contract were $3 million immediately, $2.4 million per year for the first five years (with the first payment after one year), and $3 million per year for the next five years (with the first payment at year 6). If Shawn’s interest is 8% per year, what would his contract be worth at the time he signs it?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A local newspaper headline blared, “Shawn Smith Signed for $30 Million.” A reading of the article revealed that on April 1,2009. Shawn Smith, the former record breaking center from Hockey University, signed a
$30 million package with the Edmonton Ice Knights. The terms of the contract were $3 million immediately, $2.4 million per year for the first five years (with the first payment after one year), and $3 million per year for the next five years (with the first payment at year 6). If Shawn’s interest is 8% per year, what would his contract be worth at the time he signs it?
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