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You would like to vacation in Hawaii for one week each year. You can buy a...

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 $18,500 today and a maintenance fee of $660 per year starting next year. You expect to sell the time share in 10 years for $19,000 . Alternatively you can just pay for the week vacation each year (starting next year). Each year will cost you $1,500 . If your investments earn 5% per year (compounded annually) which alternative is cheaper and by how much in present value terms?

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jeff jeffy answered 4 months ago
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