Suppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate + 1.5%.

	Yr.1		Yr. 2		Yr. 3
Capital expenditure	250,000		125,000		75,000
Cash dividends	140,000		140,000		140,000
Cash flow from operations before interest expense	750,000		780,000		800,000

Assuming the Prime rate = 7.5% each year. What will be the interest payment at year 3?

a). 25,000

b). 50,000

c). 45,000

d). 53,000

e). 10,000