^Xavier^is^a^baseball^player^negotiating^a^contract^to^play^for^a^team^for^one^year.^He^is^usually^paid^$10^million^a^year^for^playing,^{but the}^salary^cap^for^his^team^means^{that he}^will^have^to^be^paid^$5^million^this^year^and^the^remainder^next^year.^If^the^interest^rate^is⁸^percent,^how^much^should^thatremaining amount be next year? A)$5.0 million B)$5.1 million C)$5.4 million D)$6.1 million

Question

Quizplus · Accepted Answer

The remaining amount should be adjusted for the interest rate. The present value of the remaining amount is $5 million, so the future value next year should be $5 million * (1 + 0.08) = $5.4 million.

Xavier is a baseball Player negotiating a Contract to play

^Xavier^is^a^baseball^Player^negotiating^a^Contract^to^play