Problem:
TropiKana Inc. has just borrowed EUR 1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the EU interest rate is 7.00% per year and the Euro depreciates against the dollar from $1.15 per EUR at the time the loan was made to $1.10 per EUR at the end of the first year, how much interest and principle will TropiKana pay at the end of the first year if they repay the entire loan plus interest (rounded)? Explain in detail and provide step by step solution.
A. $972,727
B. $1,177,000
C. >972,727
D. $1,070,000