Question: For less than a dollar a day, Jerri can join a fitness club. She would have to pay $24.99 at the end of each month

For less than a dollar a day, Jerri can join a fitness club. She would have to pay $24.99 at the end of each month for 30 months, or she can pay a lump sum of $549 at the beginning. Interest is 16.2% compounded monthly. Should Jerri pay a lump sum or use the monthly payment feature?
Compute the present value of each alternative and determine the preferred alternative according to the criterion (round off to the nearest dollar).

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Alternative 1 Pay cash now 549 Alternative 2 PV of 2499 at the end ... View full answer

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