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May 26th, 2013, 04:42 PM  #1 
Newbie Joined: May 2013 Posts: 2 Thanks: 0  Simple Interest
Jonas recently purchased a oneyear membership at Gold's gym. He can add a second year to the membership now for $1215, or wait 11 months and pay the regular single year price of $1280. Which is the better economic alternative if money is worth 8.5%? At what discount rate would the alternatives be equivalent? I appreciate any help I can get on this one. Thanks! 
May 26th, 2013, 07:46 PM  #2 
Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,412 Thanks: 1024  Re: Simple Interest
Hint: interest @ 8.5% for 1 month on 1215 = .085/12 * 1215 = 8.60625, or 8.61 rounded


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