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In March 2018, the Buffalo Bills signed Star Lotulelei to a contract reportedly worth $50 million. Lotulelei’s salary (including bonuses) was to be paid as $17.1 million in 2018, $8.9 million in 2019, $7.5 million in 2020, and $8.25 million in 2021 and 2022. If the appropriate interest rate is 11 percent, what kind of deal did the defensive tackle sack? Assume all payments are paid at the end of each year.

Respuesta :

Using simple interest, it is found that his salaries are as follows:

  • $18.981 million in 2018.
  • $10.858 million in 2019.
  • $9.975 million in 2020.
  • $11.88 million in 2021.
  • $12.7875 million in 2022.

Simple Interest

Simple interest is used when there is a single compounding per time period.

The amount of money after t years in is modeled by:

[tex]A(t) = A(0)(1 + rt)[/tex]

In which:

  • A(0) is the initial amount.
  • r is the interest rate, as a decimal.

In this problem, considering the time from the beginning of 2018, and the interest rate of r = 0.11, his salaries for each year are given by:

[tex]A(1) = 17.1[1 + 0.11(1)] = 18.981[/tex]

[tex]A(2) = 8.9[1 + 0.11(2)] = 10.858[/tex]

[tex]A(3) = 7.5[1 + 0.11(3)] = 9.975[/tex]

[tex]A(4) = 8.25[1 + 0.11(4)] = 11.88[/tex]

[tex]A(5) = 8.25[1 + 0.11(5)] = 12.7875[/tex]

Hence, his salaries are as follows:

  • $18.981 million in 2018.
  • $10.858 million in 2019.
  • $9.975 million in 2020.
  • $11.88 million in 2021.
  • $12.7875 million in 2022.

More can be learned about simple interest at https://brainly.com/question/25296782

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