Problema Solution
Big Company purchased a machine on February 1, 2013, and will make seven semiannual payments of $28,500 beginning five years from the date of purchase. The interest rate will be 12%, compounded semiannually. Determine the purchase price of the machine.
Answer provided by our tutors
let purchase price be $x , n = 7+ 2*5 = 17 , r = 12/2 = 6%
A = x (1+0.06) 17
7*28500 = x *2.6928
x = 199,500 / 2.6928 = $ 74,086.45 (approx.)