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Great Dish believes that it will need new equipment in 8 years. The equipment will cost $26,000. What lump sum should be invested today at 12%, compounded semiannually, to yield $26,000? a. $20,186.02 c. $16,388.00 b. $16,145.82 d. $10,234.80

Respuesta :

Answer:

d. $10,234.80

Step-by-step explanation:

we are given

The equipment will cost $26,000

so, Amount is $26000

A=26000

should be invested today at 12%

r=12%=0.12

It is compounded semiannually

so, n=2

t=8

now, we can use formula

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]

now, we can plug values

[tex]26000=P(1+\frac{0.12}{2})^{2\times 8}[/tex]

now, we can solve for P

[tex]P=10234.80338[/tex]

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