The author Frankin Albert just signed a lucrative contract with Polar Bear Publishers that offers an advance of $4.2 million U.S. dollars. The catch is that the advance will be paid at the end of year 5 when the book is scheduled to be released. Mr. Albert, being profligate, desires a different package: an immediate payment of $1 million that is followed by some equal amount to be paid at the end of each year for 5 consecutive years. What equal amount will make his package equivalent to the publisher's advance. Use an interest rate is 4.40%.

$ million

Place your answer in millions of dollars using at least four decomal places. For example, if your answer is two-thirds of a million dollars, then place your answer at 0.6667. Also, do not use a dollar sign. Submit your answer to the nearest dollar amount. Work answers out to at least 4 decimal points of accuracy.

Answer rating: 100% (QA)

Answer Present value of Advan... View the full answer