AOL bought customers from CD Now for $60 per customer. CD Now's annual retention rate was 60 percent, and customers generated $15 of profit per year. Assume an annual discount rate of 12 percent. Also assume that the customers sign a contract at the start of their new relationship for one year andmake a payment at the start of every time period.

AOL does an analysis and finds that spending $10 on each customer improves the retention rate to 80%. Will AOL recover this additional expenditure of $10 on each customer? Specify which formula you use for answering this question