Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 19

A sports mortgage is an innovative way to finance cash-strapped sports programs by allowing fans to sign up to pay a "mortgage" for the right to buy good seats at football games for several decades with season tickets locked in at current prices. At Notre Dame, the locked-in price period is 50 years. If a fan pays a $130,000 "mortgage" fee now (i.e., in year 0) when season tickets are selling for $290 each, what is the equivalent annual cost of the football tickets over the 50-year period at an interest rate of 8% per year