Answer:
PTM $ 1,225,900.379
Explanation:
We will calculate the present value of the contract.
Then we will increase by 1,200,000
Next, we subtract the 9.2 bonus payable today
and distribute the rest under quarter payments:
We use present value of a lump sum
0 5,700,000 5,700,000
1 4,300,000 4,102,588.223
2 4,800,000 4,369,383.7
3 5,300,000 4,603,035.135
4 6,700,000 5,551,785.732
5 7,400,000 5,850,312.795
6 8,200,000 6,185,156.501
Then we add them: 36,362,262.09
We increase by 1,200,000
and subtract the 9,200,000 initial payment
28,362,262.09
this is the present value fothe quarterly payment
Next we calculate the equivalent compound rate per quarter:
equivalent rate: 0.002954634
Now we claculate the PTM of an annuity of 24 quearter at this rate:
PV $28,362,262.09
time 24
rate 0.002954634
PTM $ 1,225,900.379