A popular reader's digest offers lifetime subscription to the magazine for $200. Such a subscription may be

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A popular reader's digest offers lifetime subscription to the magazine for $200. Such a subscription may be given as a gift to an infant at birth (the parents can read it in those early years), or taken but by an individual for himself. Normally, the magazine costs $12.90 per year. Knowledgeable people say it probably will continue indefinitely at this $12.90 rate. . What rate of return would be obtained if a life subscription were purchased for an infant, rather than paying $12.90 per year beginning immediately? You may make any reasonable assumption!;, but the compound interest factors must be correctly used.
Compound Interest
Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. Thought to have originated in 17th century Italy, compound...
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Engineering Economic Analysis

ISBN: 9780195168075

9th Edition

Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle

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