You are going to explore 4 different plans for repayment of $5,000,000 in 5 years with the interest rate at 8%.

a. Plan 1: $1,000,000 will be paid at the end of each year plus the interest due at the end of the year for the use of money to that point.

b. Plan 2: This time the end-of-year payment is limited to the interest due, with no principal payment. Instead, the $5,000,000 owed is repaid in a lump sum at the end of the fifth year.

c. Plan 3: This will call for five equal end-of-year payments.

d. Plan 4: Pay principal and interest in one payment at the end of 5 years. Assemble the following table and fill your answer in the following fashion for each plan:

Assemble the following table and fill your answer in the following fashion for each plan.

Which is the best plan? Explain your selection.

For the Plan 3, creating a Table showing the interest payment to debt and equity for 5 years. Bond and equity interest rates are 2.5% and 7% per year with a structure of 55% bonds and 45% stocks.

(a) Year (b) (c) (d) (e) Amount owed Interest owed Total owed at Principal at beginning of for that year, end of year, payment 8% * (b) (b) +C) (0) Total End-of- Year payment year Year Payment of Interest Payment to bond interest Payment to equity interest (a) Year (b) (c) (d) (e) Amount owed Interest owed Total owed at Principal at beginning of for that year, end of year, payment 8% * (b) (b) +C) (0) Total End-of- Year payment year Year Payment of Interest Payment to bond interest Payment to equity interest