Suppose two athletes sign 10-year contracts for €80 million. In one case, we are told that the €80 million will be paid in 10 equal installments. In the other case, we are told that the Euros €80 million will be paid in 10 installments, but the installments will increase by 5% per year. Who got the better deal?

Question

Ms. Sue · Answer

As I read the problem, the first athlete who will be paid in 10 equal installments got the better deal.

I assume that the second athlete also gets a total of 80 million Euros, but that his initial yearly payments are less than 8 million.