A Company Owes 2 More Payments of $15,000 Each on an Instalment

question 24

Multiple Choice

A company owes 2 more payments of $15,000 each on an instalment purchase they made for a piece of equipment.One payment is due tomorrow and the last one a year from now.The company is going to offer the equipment manufacturer one lump-sum payment tomorrow for both payments.If interest rates are 8% compounded semi-annually, the amount the company should offer to pay tomorrow is closest to:

• A)$28,227.
• B)$28,868.
• C)$28,888.
• D)$30,000.

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Definitions:

Alternative Explanations

Different theories or reasons that account for a phenomenon, suggesting that the initial explanation may not be the only or complete reason.

Uncertainties

Situations or conditions where the outcomes are unpredictable or unknown, often leading to anxiety or stress in individuals.

Analyze Assumptions

The process of critically examining the underlying beliefs and biases that inform one's thoughts or arguments.

Productive

Relating to the ability to produce or generate a significant amount or result, often used in the context of work, creativity, or economics.