Present value with periodic

rates.

Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. He has contacted A-Dec, and the new equipment and cabinetry will cost

$18,000.

The purchase will be financed with an interest rate of

9.5%

loan over

8

years. What will Sam have to pay for this equipment if the loan calls for

semiannual

payments

(2

per year) and

weekly

payments

(52

per year)? Compare the annual cash outflows of the two payments. Why does the

weekly

payment plan have less total cash outflow each year?