Evaluating Altemative Notes A borrower has two alternatives for a loan: (1) issue a $480,000, 120-day, 7% note or (2) issue a $480,000, 120-day note that the creditor discounts at 7%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option b. Determine the proceeds received by the borrower in each situation. (1) $480,000, 120-day, 7% simple-interest (2) $480,000, 120-day note discounted at 7% c. Alternative is more favorable to the borrower since the effective interest rate on alternative 1 is and the effective rate on alternative 2 is