Answer:
Explanation:
To solve this problem, we need to use the formula for the present value of a lump sum payment: $PV = FV \cdot (1 + r)^{-t}$, where $PV$ is the present value (the lump sum payment that needs to be made), $FV$ is the future value (the amount borrowed), $r$ is the annual interest rate, and $t$ is the number of years the money is borrowed for.In this case, we are given that $FV = 12,000$, $r = 8%$, and $t = 5$ years. Plugging these values into the formula, we get $PV = 12,000 \cdot (1 + 0.08)^{-5} = 12,000 \cdot 0.5987 = 7,184.40$.Therefore, the lump sum payment that needs to be made is $PV = \boxed{7184.40}$. The answer is $\boxed{\text{(a)}\ $16,800.00}$ is incorrect.