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Sanders Co. is planning to finance on expansion of...

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Accounting

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Sanders Co. is planning to finance on expansion of its operations by borrowing $45,500. City Bank has agreed to loan Sanders the funds Sanders has two repayment options: (1) to issue a note with the principal due in 10 years and with interest payable annually or (2) to issue o note to repay $4,550 of the principal each year along with the annual interest based on the unpaid principal balance. Assume the interest rate is 95 percent for each option Required .. What amount of interest will Sanders pay in Year under option and under option 22 (Round your finel answers to the nearest dollar amount) Amount of Interest Under option 1 Under option 2 b. What amount of interest wil Sanders poy in Year 2 under option and under option 27 (Round your final onswers to the nearest dollar amount) Amount of Under option1 Undet option 2 c. Which option is more advantageous to Sanders? O Option 1 O Option 2

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