Solve the problem. Round to the nearest cent. Tabby Soft believes that it will need new equipment in 5 years. The equipment will cost $26,000. What lump sum should be invested today at 6%, compounded semiannually, to yield $26,000?
Hi there The formula of compound interest is A=p (1+r/k)^kt A future value 26000 P present value? R interest rate 0.06 K compounded semiannual 2 T time 5 years We need to solve for p P=A÷ (1+r/k)^kt So P=26,000÷(1+0.06÷2)^(2×5) P=19,346.44
