Exercise $10-1$A $($Algo$)$ Interest only versus an installment note LO $10-1$

Sanders Company is planning to finance an expansion of its operations by borrowing $$49,700.$ City Bank has agreed to loan Sanders the funds. Sanders has two repayment options: $(1)$ to issue a note with the principal due in $10$ years and with interest payable annually or $(2)$ to issue a note to repay $$4,970$ of the principal each year along with the annual interest based on the unpaid principal balance. Assume the interest rate is $11$ percent for each option.

Required

a$.$ What amount of interest will Sanders pay in Year $1$ under option $1$ and under option $2?$

b$.$ What amount of interest will Sanders pay in Year $2$ under option $1$ and under option $2?$

c$.$ Which option is less costly in the long run?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

What amount of interest will Sanders pay in Year $1$ under option $1$ and under option $2?$

Note: Round your final answers to the nearest dollar amount,

$\backslash$table$[[,\backslash$table$[[$Amount of$],[$Interest$]]],[$Under option $1,],[$Under option $2,]]$