Victor would like to subscribe to Netflix for the next 60 months (the first payment is due one month from today). The monthly charge of Netflix is $8.

On the other hand, Victor can use Amy's Netflix account if he is willing to pay her a one-time fee today.

Suppose the monthly interest rate is 1%. How much is the one-time fee paid to Amy so that Victor would be indifferent between using Amy's account and buying his own account?

Answer rating: 100% (QA)

To determine the onetime fee paid to Amy so that Victor would be indifferent between using Amys acco... View the full answer