A forklift truck costs $29,000. A company agrees to purchase such a truck with the understanding that it will make a single payment for the balance due in 3 years. The vendor agrees to the deal and offers two different interest schedules. The first schedule uses an annual effective interest rate of 13%. The second schedule uses 12.75% compounded continuously.
(a) Which schedule should the company accept?
(b) What would be size of the single payment?