The principal amount will be 11,357.
What is principal amount ?
"The principal is the amount due on any debt before interest, or the amount invested before returns. All loans start as principal, and for every designated period that the principal remains unpaid in full the loan will accrue interest and other fees."
Given ,
The total amount paid = $16,000.
Total duration is = 5 years
Interest rate compounded semi annually = 7 %
So, [tex]A = P(1 + r/2 )^\((t)[/tex]
[tex]16,000 = P( 1+ 0.07/2)^((5*2)\\\\16,000 = P(1.035)^(10)\\\\16,000 = P (1.41)\\\\P = 16,000/1.41 \\\\= 11347[/tex]
Hence, the principal amount = 11,357.
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