Revenue Recognition ..Trident..

Hi .. I have a question and a model answer, but I cant quite get my head round it..
can someone kindly explain please?

I find that they are not recognising the 5m , not sure where im going wrong..

a) Trident entered into a contract with a government body on 1 April 2011 to undertake maintenance services on a new railway line. The total revenue from the contract is $5 million over a three-year period. The contract states that $1 million will be paid at the commencement of the contract but although invoices will be subsequently sent at the end of each year, the government authority will only settle the subsequent amounts owing when the contract is completed. The invoices sent by Trident to date (including $1 million above) were as follows:
Year ended 31 March 2012 $2.8 million
Year ended 31 March 2013 $1.2 million
The balance will be invoiced on 31 March 2014. Trident has only accounted for the initial payment in the financial statements to 31 March 2012 as no subsequent amounts are to be paid until 31 March 2014. The amounts of the invoices reflect the work undertaken in the period. Trident wishes to know how to account for the revenue on the contract in the financial statements to date.
Market interest rates are currently at 6%.
(6 marks)

ANSWER
Thus Trident must recognise revenue as work is performed throughout the contract life. Discounting the revenue to reflect the delay in receipt of cash from the customer ensures that the revenue is reported at its fair value. The difference between the discounted revenue and the payment received should be recognised as interest income.
The calculation of the revenue’s fair value is as follows:

In the year ended 31 March 2012, Trident should have recorded revenue of $1•8 million/1•06/1•06, i.e. $1•6 million plus $1 million, i.e. $2•6 million. In the year ended 31 March 2013, revenue should be recorded of $1•2 million/1•06, i.e. $1•13 million. In addition, there will be an interest income of $1•6 million x 6%, i.e. $96,000 recorded in the year to 31 March 2013 which is the unwinding of the discount on the recognised revenue for the year ended 31 March 2012.