http://www.seattlepi.com/technology/businessinsider/article/CHART-The-Crazy-Contract-The-Mets-Gave-Bobby-4643113.php


Bobby Bonilla's contract of deferred payments from the New York Mets is considered a laughing stock amongst baseball fans as the Mets chose to give Bonilla 25 payments totaling $29.8 million (starting in 2011) instead of the $5.9 million they owed him in 2000.

But to criticize the deal is to not understand that Bonilla gained nothing and the Mets actually came out ahead in the deal.

If Bonilla had accepted the $5.9 million in 2000 and invested the entire amount at 8% interest, the original investment would have grown to $104.1 million by 2035* (blue line in chart below). If instead, Bonilla takes his annual payment and invests that with an 8% annual return, he would have $95.2 million by 2035 (orange line in chart below).

In other words, Bonilla lost nearly $10 million by taking the payments instead of the lump sum.