Question: If interest is computed at 4%, which construction plan is preferred? A weekly business magazine offers a 1-yearsubscripticor $58 and a 3-year subscription for $116.

If interest is computed at 4%, which construction plan is preferred?

A weekly business magazine offers a 1-yearsubscripticor $58 and a 3-year subscription for $116. If you thought you would read the magazine for at least the next 3 years, and consider 20% as a minimum rate of return, which way would you purchase the magazine: With three 1-year subscriptions or a single 3-year subscription?

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