Answer: $20,358.40
Explanation:
Find the present value of the $16,000 for the 8 years. This is an annuity so;
Present value = 16,000 * Present value interest factor of annuity, 8 years, 10%
= 16,000 * 5.3349
= $85,358.40
Subtract cost;
= 85,358.40 - 65,000
= $20,358.40
