Your favorite magazine, Fun with Present Value , offers you four different subsc

Question

Your favorite magazine, Fun with Present Value, offers you four different subscription deals for the next four years. It has guaranteed its current and future subscription rates, as shown below. Which will you take, if your rate of discount is 6 percent and you want to get the magazine for four years?

Select one:

a. A one-year subscription for $24, followed by a one-year renewal each year for $24 each year.

b. A two-year subscription for $45, followed by a two-year renewal for $48.

c. A three-year subscription for $72, followed by a one-year renewal for $24.

d. A four-year subscription for $89.

Explanation / Answer

i will chose option B

i will pay $45 to day and the remaining $48 for next two years period.

it is the lowest cost than the remining 3 alternatives.

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