Around January 1, 1993, Barbra Streisand signed a contract with Sony Corporation for 2 dollars million a year for 10 years. Suppose the first payment was made on the day of signing and that all other payments are made on the first day of the year. Suppose also that all payments are made into a bank account earning 4% a year, compounded annually. What was the present value of the contract on the day it was signed?
