Your Subscription to Consumer Reports Is About to Expire

question 32

Multiple Choice

Your subscription to Consumer Reports is about to expire.You may renew it for $24 a year or, instead, you may get a lifetime subscription to the magazine for a onetime payment of $400 today.Payments for the regular subscription are made at the beginning of each year.Using a discount rate of 5%, how many years does it take to make the lifetime subscription the better deal?

• A)25 years
• B)28 years
• C)30 years
• D)40 years

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Definitions:

Domestic Consumers

Domestic consumers refer to individuals or entities within a country that purchase goods or services for personal use.

Free Trade

The exchange of goods and services between nations without restrictive regulations such as tariffs, duties, or quotas, intended to create more efficient markets.

International Trade

The exchange of goods, services, and capital across international borders or territories.

Buyers Better Off

Refers to a situation in which consumers have an improved position, typically through lower prices, better quality, or more choices available in the market.