A magazine subscription is running out and you can renew it by sending $10 a year (the regular rate) or get a lifetime subscription to the magazine for $100. Your cost of capital is 7%. How many years would you have to live to make the lifetime subscription the better buy

15.7 years

Explanation:

We employ a mathematical approach to solve this;

Present value (PV) of $10 per year at start of year, for n years = $100 (lifetime subscription, life = n years)

Now, we need to get the equivalent amount at the end of each year. This is obtainable from the cost of capital. Which is 7% and that is same as 0.07.

Therefore, we are expecting a value of 1+0.07 = 1.07 and this brings the equivalent amount at the end of each year = 10*1.07

Now, this equivalent amount at the end of each year will give;

(10*1.07)(1.07^n - 1)/(0.07*1.07^n) = 100

Where n is the number of years

n = 15.7 years

1. avoid them

2. a talk with them

3. ask someone you trust

4. ignore

5. call police

anyone below or above ambitious can tell you. so crowns mean brainliest. getting brainliest means your answer needs a good explanation and the person asking the question can understand your answer easily. so say there's a multiple choice question. you don't just want to say your answer is a, hope it . provide evidence and reasoning so that they know that that is the correct answer. a good explanation should have evidence, good reasoning, and your opinion on why you picked that. you don't want to look up their question on the internet and see if you can answer it. pick questions that you 100% know the answer to, so than that way you can provide a better explanation.

best of luck,

the divergent