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24 May, 02:33

A tall starbucks coffee costs $1.65 a day. of the bank's daily interest rate is 0.01%, compounded daily, and if the starbucks price never changed, what would an endless, inheritable free subscription to one starbucks coffee per day be worth today

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  1. 24 May, 02:53
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    This problem requires the equation for perpetuity. Since the problem asks for the present value for an infinite period subscription for one Starbucks coffee, the equation would be PV = A/i wherein A is the price of 1 cup of coffee which is $1.65. The interest rate can be computed by using the equation i = (e^rate) - 1. The interest rate computed is 1.0001x10^-4. The present value is $16499.18.
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Home » Business » A tall starbucks coffee costs $1.65 a day. of the bank's daily interest rate is 0.01%, compounded daily, and if the starbucks price never changed, what would an endless, inheritable free subscription to one starbucks coffee per day be worth today
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