To expand its operation in Ontario, Dundar Mifflin has appliedfor a $3,500,000 loan from the TD Bank. According to Dundar Mifflinfinancial analyst, the company can only afford a maximum yearlyloan payment of $1,000,000. The bank has offered Dundar Mifflin thefollowing:
Option 1: 3 year loan with an 8 percent interest rate
Option 2: 4 year loan with a 10 percent interest rate
Option 3: 5 year loan with a 12 percent interest rate
Required:
- Compute the loan payment under each option for year 1.
- Which option should the company choose?
Please provide step by step/explanation much appreciated
