You would like to vacation in Hawaii for one week each year. You can buy a time share for a vacation home in Hawaii for $20,000 today and a maintenance fee of $550 per year starting next year. You expect to sell the time share in 10 years for $25,000 Alternatively you can just pay for the week vacation each year (starting next year). Each year will cost you $2,500. If your investments earn 5% per year (compounded annually) which alternative is cheaper and by how much in present value terms?

Group of answer choices

Buy the time share it will save you $10,925

Pay each year it will save you $11,134

Pay each year it will save you $10,005

Buy the time share it will save you $10,405