How much do save or lose by buying the time share in pv

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You would like to vacation in Hawaii for one week each year. You can buy a time share for a vacation home in Hawaii for $20,750 today and a maintenance fee of $694 per year starting next year. You expect to sell the time share in 7 years for $26,806. Alternatively you can just pay for the week vacation each year (starting next year). Each year will cost you $4,429 .

Problem 1: If your investments earn 2.5% per year (compounded annually) how much do you save or lose by buying the time share in PV terms.

Reference no: EM132755080

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