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Interest

Interest. Credit Card Example The daily rate is calculated 15% APR Daily rate is 15%/365 or 0.0411% Interest is compounded daily Effective APR is 16.18%. Salary vs. R esidual Income. Earning a Salary. 1:1 ratio of hours worked and dollars earned

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Interest

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  1. Interest Credit Card Example • The daily rate is calculated • 15% APR • Daily rate is 15%/365 or 0.0411% • Interest is compounded daily • Effective APR is 16.18%

  2. Salary vs. Residual Income

  3. Earning a Salary • 1:1 ratio of hours worked and dollars earned • Stop generating income when you stop working • Earn more money  upper limit • Promotion • Work more hours

  4. Residual Income • Passive or recurring • Continues to generate itself after the work is completed • Recurrent pay • Possibility to earn more while working less • Put in long hours up front • Rewards are for a longer duration • Continue when work is stopped • Earn recurring income on initial investment

  5. Examples of Residual Income in Sport Management • Merchandise sales • Advertising sales • Parking lot rentals • Use of venue other than intended purpose • Concerts at baseball stadiums

  6. Vs.

  7. Philadelphia DA“Did Andrew Bynum defraud the 76ers?” • Bynum • Taking money yet not playing in one game this season • Philadelphia DA • Fraud, theft of services, robbery • 76ers • Took responsibility of Bynum’s contract despite knowing about his history of knee problems • Fans • Feel cheated because of the Bynum deal • Economic standpoint • externalities

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