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

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	$510,100.00	0	$306,275.00
1	$510,100.00	1	$306,275.00
2	$510,100.00	2	$803,550.00
3	$510,100.00	3	$803,550.00
4	$510,100.00	4	$803,550.00

The newspapers report the total dollars of the contract, so contract A will pay a total of $2,550,500.00, while contract B will pay $3,023,200.00. 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 B?

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