You have decided to purchase a capital asset using an


For each of the following loan options (a & b) compute the following values:

- annual loan payment

- proportion of principle and interest in the first annual payment

- 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 850,000 at a rate of 8% for 25 years.

b. You have decided to purchase a capital asset for 850,000 at a rate of 7% for 15 years.

c. Which option would you take and why? Explain.

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Financial Management: You have decided to purchase a capital asset using an
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