Answer:
The right solution is "$2697.54".
Explanation:
Given:
Interest rate,
r = 8.50%
or,
= 0.085
Number of periods,
n = 19
Present value,
= $25,000
As we know,
⇒ [tex]Present \ value=C\times \frac{[1-(1+5)^{-n}]}{r}[/tex]
By substituting the values, we get
⇒ [tex]25000=C\times \frac{[1-(1+0.085)^{-19}]}{0.085}[/tex]
⇒ [tex]2125=C\times [1-0.21224378136][/tex]
⇒ [tex]2125=C\times 0.787756219[/tex]
⇒ [tex]C=\frac{2125}{0.787756219}[/tex]
⇒ [tex]=2697.54[/tex] ($)
