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Question: A baseball player just signed a contact with the Houston Astros. He will receive $3 million upfront (today) and will be receive the subsequent payments as a growing annuity starting next year (one year from today) with a growth rate (g) of 5% for the next 10 years. In other words, the first payment one year from today is 3(1xg) and so on. What is the Present Value of this contract if the interest rate is 6%, compounded annually.

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