Which is the better magazine deal, 1 yr for $15 or 2 yrs for $29.50 assume 3.5% inflation, invest @5%? & why?

Question

Which is the better magazine deal, 1 yr for $20 or 2 yrs for 30 assuming 3.5% inflation, can invest @5%?. And why is your answer a better deal. No answer wanted without rationale

Which is the better deal to take when subscribing to a magazine? One year at $15 or 2 years at $29.50 assuming a 3.5% rate of inflation and that I can invest money not spent at 5%. Also assume that I will buy this magazine for the next two years.

Answer 1

This is a trick question. You are asking about the Time Value of Money. As most of us know that a dollar today is not worth the same as it will a year from now. You add a little more of a twist by asking about potential investment of the unused money if you go with the 1 year deal. What in the world are you going to invest in with only $14.50? You can't buy a bond and even if you do invest you would be crazy to cash in your investment after only 1 year expecially if your return is only $.73. Plus there are no savings accounts that offer a 5% return on deposits either (if you know of 1, I need to know what bank).The fees in cashing that in would superceed that retrun. So, my answer will be dependant on if this is just a math question or a reality logic question.

Math:
Deal 1
Pay $15 for the magazine subscription
Invest the difference from what you would have paid for the 2 yr sub. $14.50 @ 5% for 1 year
The return on Investment is $.73
Pay the $15.53 in year 2 after inflation is figured in
Total payment for Deal 1 $15 + $15.53 = $30.53 - $.73 = $29.80

Deal 2
Pay $29.50 for 2 years worth of magazines.
invest nothing

My choice is to go with deal 2

Logic:
Do you have the extra $14.50 in your expendable income now with gas prices so high? If you do, you go with deal 2. If not you choose deal 1.

Do you even have the brain power to try and figure out the math? if not, don't buy the magazine and invest in your education.

What is more important to you... instant gratification or the knowledge you have something locked down?
If you need instant gratification you go with deal 1.
If you like to have good prices locked in go with deal 2.

Those are my answers and I'm sticking to them.

Answer 2

Well, let's see. If you buy it for two years at the annual rate, you'd pay:
$15 + $15*1.035 = $30.525, because the rate might go up with inflation.
You would make $15*0.05 or $0.75 before it was time to pay for the second year's subscription, so you would really end up paying $30.525-$0.75, or $29.775.

If you bought the magazine at the two year rate, you would pay exactly $29.50 at once. $29.50 < $29.77, so you would be better off taking the two year subscription. If the subscription rate of the magazine did not go up with inflation, then you'd be better off buying it one year at a time. I don't think I overlooked anything, but it's possible. Oh, yes . . . if you need a stamp to send in your payment, you would be better off buying both years at once because stamps in the US are $0.39. It would take two stamps to send in two payments, but only one to send in one payment (assuming you do it by mail and they don't give you a prepaid envelope). Remember the cost of money orders if you pay that way too!

Answer 3

With 1 yr you spend $15. With 2 you spend 29.50 and lose 1.5% of 14.50 - 22 cents. $30 for 2 yrs at the first rate is still more expensive than 29.72 at the second.

$30 for 2 yrs is better than the 30.23 you would spend/lose on the second scenario.

Answer 4

What happens if you bite for 2 years and the magazine publisher goes bankrupt in 3 months?

;-P

Answer 5

My choices : A ) Inzy : Bcoz he is the only crcketer i know who looks like 1 ) A school boy, when clean shaven, & 2) A prophet who is just two ticks away from blessing the umpires. (This happens when he grows a beard.) B ) Jacque Kallis : Bcoz, 1) This man looks less like a cricketer and more like a gladiator ( I hav met him & i can tel u the man is huge) 2) Every time i se him he has more runs and wickets to his name but less & less hair on his head. And yes, u did repeat Michael Clarke at No19 & No 55.

Answer 6

take the one year why in case you have to move go to another state so take the one year.unless you like the magazine then go for two

Answer 7

Jea*us Chris*! Are u kidding me man?? Either way it is cheaper than buying off the shelf at ur local AmPm. Are u ok?

Answer 8

think you should get a life instead of magazine

Answer 9

1 yr
you might not like that magezine anymore

Answer 10

just save your money cheapskate--woow