Question

Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce attorneys. The membership dues for the ADLA are $800 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 ADLA also has an option for members to buy a lifetime membership today for $8,500 and never have to pay annual membership dues. Obviously, the lifetime membership isn't a good deal if you only remain a member for a couple of years, but if you remain a member for 10 years, it's a great deal. Suppose that the appropriate annual interest rate is 7.6%. What is the minimum number of years that Lloyd must remain a member of the ADLA so that the lifetime membership is cheaper (on a present value basis) than paying $800 in annual membership dues? (Note: Round your answer up to the nearest year.) 16 years 19 years 13 years 23 years

Answer 1

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w ENG 03:06 22-03-2020 E 16 199+ х BQ242 fx BM BN BO BP BO BR BS SUM1 ANNUITY DUE 241 242 243 244 245 246 247 248 249 250 SET CALCULATOR TO "BEG" MODE BY PRESSING "2ND", THEN PRESS "PMT", THEN AGAIN PRESS "2ND", THEN PRESS "SET" I/Y = PV = PMT = FV = 7.6 8500 -800 0 ANSWER CPT N = 19 YEARS 251 252 253 254 255 256 257 SUM2 392 5 N I/Y PMT PV 258 259 0 -24 ANSWER CPT FV 4857541024.43 260 261 262 263 264 ... BOND Sheet6 Sheet4 PV FV choice choice EAR nper EAR nper WACC Sheet1 Sheet2 Sheet3 Sheets HERO WACC AFN MISI... +