Answer:
A sum of $ 1,446,056.59 will be equivalent of the semiannual payment at the given discount rate of 6% annual
Explanation:
We need to solve for the present value of a annuity-due (payment at the beginning of the period) of eight payment of $ 200,000 every six month discounted at 6% annual:
[tex]C \times \frac{1-(1+r)^{-time} }{rate}(1+r) = PV\\[/tex]
C 200,000
time 8
rate 0.03 (6% is the annual rate we have semiannual payment so we divide by 2; thus 3%)
[tex]200000 \times \frac{1-(1+0.03)^{-8} }{0.03}(1+.03) = PV\\[/tex]
PV $1,446,056.5910
