323.13

13.The Penn State Alumni Association keeps asking me to buy a lifetime membership at a cost of $500. The annual membership fee is $25 and my next one is due in a year.

• If I can earn 8% on investments, does it make sense for me to buy the lifetime membership? EXPLAIN your approach to this problem. (4)

• If the annual membership fee increases by 2.5% per year (to approximately keep up with inflation), should I buy the lifetime membership? EXPLAIN your approach to this problem. (6)

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