Assume your vision has recently deteriorated. You are considering tow alternatives. The first option is to wear contact lenses. You estimate that your annual contact lens cost will be $300 paid at the end of the year. The second option is to undergo the LASIK surgical procedure. This will cost $4.000 but the doctor will allow you to pay $1,000 at the time of the procedure and then $1,000 per year for three more years (all four payments at the beginning of the year). Assume that you expect to live for another 40 years. Ignore inflation. Your discount rate is 10%. What should you do?
Hint: This problem does not require using the EAC, but that is one way to solve it.