Answer:
The answer is "$20906.15".
Explanation:
In the next five years, Mr. Rafiq must be due to 7000 Ahmed and in [tex]7 \frac{1}{2}[/tex] years Rs. 15000 must be due.
Interest r = 8% semi-annually aggregated
Hence a one-off fee only at end of 6 years is an FV fee at 5 years plus a [tex]7 \frac{1}{2}[/tex] year payment.
[tex]\to[/tex]Year 6 single payment[tex]= CF5 \times (1+\frac{r}{2})^{(2 \times 1)} + \frac{CF6}{(1+\frac{r}{2})^{(2\times 1.5)}}[/tex]
[tex]\to[/tex] Payment at year 6 [tex]= 7000 \times {(1+\frac{0.08}{2})}^2 + \frac{15000}{(1+\frac{0.08}{2})^3 }[/tex]
[tex]= \$ \ 20906.15[/tex]
