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Sanders Company is planning to finance an expansion of its operations by borrowing $$54,800.$ City Bank has agreed to loan Sanders the funds. Sanders has two repayment options: $(1)$ to issue a note with the principal due in $10$ years and with interest payable annually or $(2)$ to issue a note to repay $$5,480$ of the principal each year along with the annual interest based on the unpaid principal balance. Assume the interest rate is $10$ percent for each option.

Required:

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.

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

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

Which option is more advantageous if Sanders wants to minimize costs?