Question

Problem 4. Faculty are expected to attend graduation once per year (ie either Spring or Fall) wearing full academic regalia. Renting regalia costs $80 for each graduation, while purchasing a new set costs $870 and should last more than 20 years. Some faculty members join academia later in their careers. For a nominal interest rate of 6% compounded annually, calculate how many years of service make it a better choice to buy rather than rent (show all work)

Answer 1