A mortgage instrument pays $1.2 million at the end of each of the next two years.An investor has an alternative investment with the same amount of risk that will pay interest at 8% compounded semiannually.Which of the following amounts is closest to what the investor should pay for the mortgage instrument?
A) $2,135,232
B) $2,288,889
C) $2,374,897
D) $2,469,041
E) $2,854,512
Correct Answer:
Verified
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