A sports mortgage is the brainchild of Stadium Capital Financing Group, a company headquartered in Chicago, Illinois. It is an innovative way to finance cash-strapped sports programs by allowing fans to sign up to pay a "mortgage" over a certain number of years for the right to buy good seats at football games for several decades with season ticket prices locked in. The locked-in price period is 50 years in California. Assume you and your brother went to UCLA. Your brother, Harold, purchases a $40,000 mortgage and pays for it now to get season tickets for $290 each for 50 years, while you, being a three-time alumnus of the same university, are able to buy season tickets at $390 in year 1, with prices increasing by $20 per year for 50 years. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Which of you made the better deal at an interest rate of 8% per year? The present worth of Harold's investment is $- made the better deal. You and the present worth of your investment is $-

A sports mortgage is the brainchild of Stadium Capital Financing Group, a company headquartered in Chicago, Illinois. It is an innovative way to finance cash-strapped sports programs by allowing fans to sign up to pay a "mortgage" over a certain number of years for the right to buy good seats at football games for several decades with season ticket prices locked in. The locked-in price period is 50 years in California. Assume you and your brother went to UCLA. Your brother, Harold, purchases a $40,000 mortgage and pays for it now to get season tickets for $290 each for 50 years, while you, being a three-time alumnus of the same university, are able to buy season tickets at $390 in year 1, with prices increasing by $20 per year for 50 years. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Which of you made the better deal at an interest rate of 8% per year? The present worth of Harold's investment is $- made the better deal. You and the present worth of your investment is $-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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