Posted by Regina on .
Jim signed a new deal for $10 million with the Toronto maple leafs. THe terms of the contract were 1 million immediately and 800,000 per year for the next 5 years (first payment after 1 year) and $1 million per year for the next 5 years (first payment at year 6). If jim's interest rate is 8% per year, how much is his contract worth at the time of the signing?

Economics 
economyst,
An Excel spreadsheet is very helpful for these types of calculations.
(in thousands for brevity):
PV = 1000 + 800/(1.08) + 800/1.08)^2 + 800/(1.08)^3 + .... 1000/(1.08)^10