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

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