Answer:
$992.227
Step-by-step explanation:
We have given amount of payment =$12000
Total time =8 years, as payment is payable semiannually so total period = 8×2=16 period
Rate of interest =7% annually so 3.5% semiannually
Present value annuity factor for 16 period at rate of 3.5%
[tex]=\sum \frac{1}{(1+3.5)^1}+\frac{1}{(1+3.5)^2}+\frac{1}{(1+3.5)^3}+----------------\frac{1}{(1+3.5)^{16}}=12.094[/tex]
So annuity [tex]=\frac{total\ payment}{present\ value\ annuity\ factor}=\frac{$12000}{12.094}=$992.227[/tex]
