Your Firm Has Sold a Fleet of 100 Cars to a Local

Multiple Choice

Your firm has sold a fleet of 100 cars to a local firm at a discounted price of $20,000 each (a total of $2,000,000) due in six months.You are willing to discount the purchase price at an annual rate of 4% if the firm pays cash today.What is the least amount of money you will accept if the firm pays your company today?

A) $2,039,608
B) $1,961,161
C) $1,960,495
D) This problem cannot be answered because we have an annual interest rate but only one-half year in time.