Answer: the company should invest $12191 each week
Step-by-step explanation:
The amount that the company needs is $5,400,000
We would apply the periodic interest rate formula which is expressed as
P = a/[{(1+r)^n]-1}/{r(1+r)^n}]
Where
P represents the weekly payments.
a represents the amount that the company needs
r represents the rate.
n represents number of weekly payments. Therefore
a = 5,400000
There are 52 weeks in a year
r = 0.079/52 = 0.0015
n = 52 × 14 = 728
Therefore,
P = 5400000/[{(1+0.0015)^728]-1}/{0.0015(1+0.0015)^728}]
5400000/[{(1.0015)^728]-1}/{0.0015(1.0015)^728}]
P = 5400000/{2.98 -1}/[0.0015(2.98)]
P = 5400000/(1.98/0.00447)
P = 5400000/442.95
P = $12191
