You are considering purchasing a membership to a store that offers bulk discounts to its members. If you expected to save $50 a year (indefinitely) and the market rate was 12%, at what price would you be indifferent to the membership? What if the membership cost $200, how much would you need so save each year to make it worth it?

Therefore, if you are expecting a savings of only $50 per year from this particular store’s discounted rates – and assuming the market rate will remain consistent – then it would not make sense financially speaking to purchase this particular membership. If the savings exceed or equal to 17x what you pay upfront (3,333.34), it may be worth more in terms of long-term return on investment.

Ultimately, when considering any type of subscription service that offers discounts based on usage or frequency – such as a members-only store – research should always be conducted beforehand so an assessment can be made as to whether or not these types of services are truly worth their cost.