Question: A creative general manager has offered two different contracts to a vain quarterback. The contracts are shown below: CONTACT A CONTRACT B YEAR SALARY YEAR

A creative general manager has offered two different contracts to a vain quarterback. The contracts are shown below:

CONTACT A		CONTRACT B
YEAR	SALARY	YEAR	SALARY
0	$512,300.00	0	$301,000.00
1	$512,300.00	1	$301,000.00
2	$512,300.00	2	$805,350.00
3	$512,300.00	3	$805,350.00
4	$512,300.00	4	$805,350.00

The newspapers report the total dollars of the contract, so contract A will pay a total of $2,561,500.00, while contract B will pay $3,018,050.00. The player will select contract B as it has more publicity. The team can earn 8.00% on their investments, so let's determine the value of each contract.

What is the present value of contract A and contract B?

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