George is a financial planner in Ohio. He wants to join the National Association of...
60.1K
Verified Solution
Link Copied!
Question
Finance
George is a financial planner in Ohio. He wants to join the National Association of Personal Financial Advisors (NAPFA), a professional organization for financial advisors. The membership dues for the NAPFA are $670 per year and must be paid at the beginning of each year. For instance, membership dues for the first year are paid today, and dues for the second year are payable one year from today. However, the NAPFA also has an option for members to buy a lifetime membership today for $7850 and never have to pay annual membership dues.
Obviously, the lifetime membership isnt a good deal if you only remain a member for a couple of years, but if you remain a member for 50 years, its a great deal. Suppose that the appropriate annual interest rate is 7.8%.
What is the minimum number of years that George must remain a member of the NAPFA so that the lifetime membership is cheaper (on a present value basis) than paying $67 in annual membership dues? (Note: Enter only a whole number by rounding your answer UP to the nearest year, i.e. 15.23 becomes 16).
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
