A small manufacturing company borrowed $1 million and repaid the loan through monthly payments of $20,000 for 2 years plus a single lump-sum payment of $1 million at the end of 2 years. The interest rate on the loan was closest to:
a. 0.5% per month
b. 2% per month
c. 2% per year
d. 8% per year
Please explain your answer