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7. Your subscription to Investing Wisely Weekly is about to expire. You plan to subscribe to the magazine for the rest of your life, and you can renew it by paying $85 annually, beginning immediately, or you can get a lifetime subscription for $850, also payable immediately. Assuming that you can earn 6.0% on your funds and that the annual renewal rate will remain constant, how many years must you live to make the lifetime subscription the better buy

Respuesta :

Answer:

14.32 years

Explanation:

In this question, we use the NPER formula which is shown in the spreadsheet.  

Given that,  

Present value = $850

Future value = $0

PMT = $85

Rate of interest = 6%

The formula is shown below:

= NPER(Rate;PMT;-PV;FV;type)

The present value come in negative

So, after applying the above formula, the number of years is 14.32 years

       

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