At the University Academy, you can sign up to pay P105,000 now, or over a 10-year period, for the right to buy top seats for UA games during the next 30 years. In return, the seats themselves will stay locked in at current-year prices. Season game tickets in tier 1 are currently selling for P350 each. A UA fanatic plans to purchase the mortgage along with a current-season ticket and pay for both now, then buy a ticket each year for the next 30 years. What is the total present worth of the pricing plan at an interest rate of 10% per year?
At the University Academy, you can sign up to pay P105,000 now, or over a 10-year period, for the right to buy top seats for UA games during the next 30 years. In return, the seats themselves will stay locked in at current-year prices. Season game tickets in tier 1 are currently selling for P350 each. A UA fanatic plans to purchase the mortgage along with a current-season ticket and pay for both now, then buy a ticket each year for the next 30 years. What is the total present worth of the pricing plan at an interest rate of 10% per year?
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
Problem 13CQ
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At the University Academy, you can sign up to pay P105,000 now, or over a 10-year period, for the right to buy top seats for UA games during the next 30 years. In return, the seats themselves will stay locked in at current-year prices. Season game tickets in tier 1 are currently selling for P350 each. A UA fanatic plans to purchase the mortgage along with a current-season ticket and pay for both now, then buy a ticket each year for the next 30 years. What is the total present worth of the pricing plan at an interest rate of 10% per year?
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