To expand its operation in Ontario, Dundar Mifflin has applied for a $3,500,000 loan from the TD Bank. According to Dundar Mifflin financial analyst,...
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To expand its operation in Ontario, Dundar Mifflin has applied for

a $3,500,000 loan from the 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


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

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