Your local gift shop starts a membership program for its loyal customers. Customers who have a 9-year membership card will get a 18% discount on every purchase and the store owner believes that a loyal customer spends $500 (before discount) on average in the store every year. The market interest rate is 4.8%. If the store owners expectations are correct, how much can she charge for the 9-year membership card? (Note: Assume the customers make all their purchases at the end of the year.) $645.44 $676.42 $698.71 $709.15

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your local gift shop starts a membership program for its loyal customers. Customers
who have a 9-year membership card will get a 18% discount on every purchase and
the store owner believes that a loyal customer spends $500 (before discount) on
average in the store every year. The market interest rate is 4.8%. If the store owners
expectations are correct, how much can she charge for the 9-year membership card?
(Note: Assume the customers make all their purchases at the end of the year.)
$645.44
$676.42
$698.71
$709.15
Transcribed Image Text:Your local gift shop starts a membership program for its loyal customers. Customers who have a 9-year membership card will get a 18% discount on every purchase and the store owner believes that a loyal customer spends $500 (before discount) on average in the store every year. The market interest rate is 4.8%. If the store owners expectations are correct, how much can she charge for the 9-year membership card? (Note: Assume the customers make all their purchases at the end of the year.) $645.44 $676.42 $698.71 $709.15
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