Answer:
$28,217
Explanation:
We discount the future cashflows by the effective interest rate to determine the Present Value amount.
Payments of fixed amounts over a period of time are known as annuities, hence we want to find the Present Value of an Annuity investment.
Here I will use a financial calculator :
PMT = $5,309
P/yr = 1
r = 7.4%
n = 7
FV = $0
PV = ?
Conclusion
The principle (PV) will be $28,217
