3 ms·

So when the report says “10 times what they paid”, it means “10 times the amount the $1B would be worth in 75 years at the currently-forecasted risk-free rate o

• Retric 3y ago
  10 times the inflation adjusted number seems to be the implication. However, the company receives money every year not a single lump sum at the end. If I lend you 10$ and you agree to pay me an inflation adjusted 1$/year for 100 years that’s vastly better than getting an inflation adjusted 100$ in 100 years. In the initial example the first dollar is discounted X%, the second X%^2, the third X%^3… Where getting paid an inflation adjusted 100$ after 100 years is fully discounted X%^100. The first case is equivalent to a bond paying nearly 10% + inflation with annual payments where the second is closer to 4.7% + inflation without annual payouts. PS: Further it’s ~zero risk as the contract states the city is responsible if revenues fall below projections.