You have the choice between paying $95 for a 4-year magazine subscription today or
buying four 1-year subscriptions, which will cost $25, payable at the beginning of each
year. Assume that the price of the 1-year subscription will remain unchanged and
ignore any hassles involved with renewing each year. Which is the better choice if
your opportunity cost of funds is 4%?

Question

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The Answer of You have the choice between paying $95 for a 4-year magazine subscription today or
buying four 1-year subscriptions, which will cost $25, payable at the beginning of each
year. Assume that the price of the 1-year subscription will remain unchanged and
ignore any hassles involved with renewing each year. Which is the better choice if
your opportunity cost of funds is 4%?

You Have the Choice Between Paying $95 for a 4-Year