To expand its operation in Ontario, Dundar Mifflin has applied for a $3,500,000 loan from TD Bank. According to Dundar Mifflin financial analyst, the company can only afford a maximum yearly loan payment of $1,000,000. The bank has offered Dundar Mifflin the following:

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:

1. Compute the loan payment under each option for year 1.
2. Which option should the company choose?

Answer rating: 100% (QA)

1 Option 1 135811730 Option 2 1104147813 3D Option 3 97093406 2 Option 3 Stepbystep ... View the full answer