directors to devise innovative ways to fi nance cashstrapped
sports programs. One of the latest schemes
for big-time athletics is the “sports mortgage.” At
the University of Kansas, Jayhawk fans can sign up
to pay $105,000 now, or over a 10-year period, for
the right to buy top seats for football games during
the next 30 years. In return, the seats themselves
will stay locked in at current-year prices. Season
tickets in tier 1 are currently selling for $350 each.
A fan plans to purchase the sports mortgage along
with a current-season ticket and pay for both now ,
then buy a ticket each year for the next 30 years.
What is the total present worth of the pricing plan at
an interest rate of 10% per year?