Amy's subscription to cosmopolitan has ended and she wants to renew it by either paying $15.64 annually at a regular rate (ignoring inflation)or subscribing by lifetime membership paying $100.Payments for regular subscription are made at beginning of the year.if annual opportunity cost is 11.24%,how many years AMY has to live to make lifetime membership a better buy?
Thursday, February 3, 2011
Amy's subscription - Time Value of Money
Amy's subscription to cosmopolitan has ended and she wants to renew it by either paying $15.64 annually at a regular rate (ignoring inflation)or subscribing by lifetime membership paying $100.Payments for regular subscription are made at beginning of the year.if annual opportunity cost is 11.24%,how many years AMY has to live to make lifetime membership a better buy?
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