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  3. 5a a company is discussing a 05 million loan with...

Question: 5a a company is discussing a 05 million loan with...

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5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year. Option B: Interest is to be received on a yearly basis and the Principal is to be receivedat the end. All loan repayment items are end-of-year payments. Which options is better for the company?For Option A, construct a spreadsheet that shows for each period the following: annual payment, interest received, recovered capital, and unrecovered capital. For Option B, construct a spreadsheet that shows for periods 1 to 4, interest payments, and for the 5th (last) period, interest as well as the principal

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