Answer:
The correct answer is option (A) $519,799.59.
Step-by-step explanation:
According to the scenario, the given data are as follows:
Payment 1st year = $218,000
Payment 2nd year = $224,000
Payment 3rd year = $238,000
Rate of interest = 14.5%
So, We can calculate the amount Southern Tours willing to pay by using following formula:
We add the payment for 3 years by simple interest as:
=
+
+

=
+
+

= $519,799.59
Hence, the amount Southern Tours willing to pay is $519,799.59.