What equal amount will make her offer package equivalent to


An actress signed a contract with a major Hollywood studio that provides compensation as a lump sum bonus in the amount of $5.80 million to be received at the end of year 1 when her picture is scheduled to be released. The actress prefers to start spending part of her compensation today and instead wants $1 million immediately that is followed by some equal amount to be paid at the end of each year, beginning in one year, for 6 consecutive years. What equal amount will make her offer package equivalent to the studio's bonus. Use an interest rate of 4%.

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Financial Management: What equal amount will make her offer package equivalent to
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