What is the equivalent cost of this service today

Reference no: EM132202340

Question - You are buying a new music service where you have the option to pay annually. In this first year, the cost will be $500, payable at the end of the year. The annual cost will increase by 7% per year, always payable at the end of the year, and you plan to keep the service a very long time, for 12 years. The annual interest rate is 12%. What is the equivalent cost of this service today?

Reference no: EM132202340

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