Problem 3(3): The soccer player Messi is estimated to have earned $127mil. in 2019. He currently is 32 years old. Suppose that he will be able to play professionally for another 5 years, and then he retires and will make $1 of income from then on for 40 years. Within the next 5 years, his income will decline by 2% per year. What is the present value of Messi’s stream of future salaries, if the annual interest rate is 2%?
Problem 3(3): The soccer player Messi is estimated to have earned $127mil. in 2019. He currently is 32 years old. Suppose that he will be able to play professionally for another 5 years, and then he retires and will make $1 of income from then on for 40 years. Within the next 5 years, his income will decline by 2% per year. What is the present value of Messi’s stream of future salaries, if the annual interest rate is 2%?
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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Problem 3(3):
The soccer player Messi is estimated to have earned $127mil. in 2019. He currently is 32 years old. Suppose that he will be able to play professionally for another 5 years, and then he retires and will make $1 of income from then on for 40 years. Within the next 5 years, his income will decline by 2% per year. What is the present value of Messi’s stream of future salaries, if the annual interest rate is 2%?
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