Amazon Prime customers spend $1,400 per year (inclusive of subscription fees) with an average margin of 30% yielding the company about $420 per year. The retention rate is about 93% per year. In contrast, Non-Prime purchasers spend about $700 per year with Amazon, although the gross margins from the non-Prime group are higher because of the free shipping offered to Prime members.

Calculate the expected customer lifetime value of an Amazon Prime customer. You can use the simplest formula and assume anything not provided above.

CLV=margin per period/(1-retention+interest rate)