SOLUTION: In return for a loan, with money worth 7% compounded semiannually, a man promises to pay $600 at the end of each 6 months for 8 years. (a) Find the sum which he borrows.

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Question 1195220: In return for a loan, with money worth 7% compounded semiannually, a man promises to pay $600 at the end of each 6 months for 8 years. (a) Find the sum which he borrows.
Answer by Theo(13342) About Me  (Show Source):
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the sum which he borrows is $7256.47.
7% per year / 2 compounding periods per year = 3.5% per semi-annual period.
8 years * 2 compounding periods per year = 16 semi-annual periods.