Quote:
Originally Posted by Jason14h
Edit - maybe I misunderstood - if they are depositing / segregating the discounted amount there has to be a ROI component to get the the eventual proper payout amount ?? I know the team doesn’t make money off it - but it pays interest towards the eventual payout amount to make the future amount correct
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Correct.
The discount rate is set. From that they calculate the current values for each of the 3 years, in order to have the 10 payments of $900k each, from 2035-45 or whatever it is.
The team would have to make the payments in year 1, 2 and 3 (otherwise it wouldn't be a 3 year deal). Those payments would be somewhere around $1.57M each. And then that money would sit in the trust account until paid.
Well, not quite (the bold). The team wouldn't pay interest, the funds would earn interest