For each of the following loan options (a & b) compute thefollowing values:
? annual loan payment
? proportion of principle and interest in the first annualpayment
? total interest paid over the entire time line of the loan
? total principal paid over the entire time line of the loan
a. You have decided to purchase a capital asset using an 850,000at a rate of 8% for 25 years.
b. You have decided to purchase a capital asset for 850,000 at arate of 7% for 15 years.
c. Which option would you take and why? Explain.
