Rosie's florist borrows $300,000 to be paid off in six years. the loan payments are semiannual with the first payment due in six months, and interest is at 6%.

what is the amount of each payment? (a) $25,500.(b) $29,761.(c) $25,750.(d) $30,139.

option (D) $30,139

Explanation:

Data provided in the question:

Amount borrowed = $300,000

Interest rate = 6%

Since payments are made semi-annually

Total number of payments made in 6 years = 2 × 6 = 12

Semi-annual interest rate = 6% ÷ 2 = 3% = 0.03

Now,

Amount borrowed = Each payment ×

thus,

$300,000 = Each payment ×

$300,000 = Each payment × 9.954

or

Each payment amount = $300,000 ÷ 9.954

= $30,138.64 ≈ $30,139

hence,

The answer is option (D) $30,139

c is the correct answer.