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10 May, 08:50

A restaurant needs $540,000 in 6 years for an addition. Find the total interest earned if payments are made at the end of each semiannual period with interest at 8% compounded semiannually. A. $108,756

B. $73,612.80

C. $343,354

D. $35,937

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  1. 10 May, 09:01
    0
    A

    Step-by-step explanation:

    A=pmt [ ((1+r/n) ^ (nt) - 1) : (r/n) ]

    A future value 540000

    Pmt semiannual payment?

    R interest rate 0.08

    N semiannual 2

    T time 6 years

    Pmt = 540,000: (((1+0.08:2) ^ (2*6) - 1) : (0.08:2)) = 35,938.17

    Now find total payments

    35,938.17*2*6=431,258.04

    interest earnd

    540,000-431,258.04

    =108,741.96

    Which approximatly equals

    $108,756
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