### Question Description

Analyze and calculate the following scenarios in 525 words, including which one would you choose and why, and which financing option is best for your busines:

• Investor #1 decided to loan you the \$300,000, paying all of the interest (8% per year) and principal in one lump sum at the end of 5 years.
• Investor #2 offers you the \$300,000, paying interest at the rate of 8% per year for 4 years and then a final payment of interest and principal at the end of the 5th year.

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Pay all of the interest (8% per year) and principal in one lump sum at the end of 5 years Amount Period (years) Interes rate \$ 300,000 5 8% FV= PV × (1 + r)n Answer- Total Payment Interest Paid Refer to the Solved Example 6 on Page 84 of your text. Pay interest at the rate of 8% per year for 4 years and then a final payment of interest and principal at the end of the 5 Amount Period (years) Interes rate \$ 300,000 5 8% Answer Annual Interest PaymentYear 5 Payment Total PaymentInterest Paid- Refer to the Solved Example 6 on Page 84 of your text. Scenario #1 Scenario #2 Total Payment \$ \$ - Interest paid \$ \$ - Which of the scenarios is the best option? Answer: Refer to the Solved Example 6 on Page 84 of your text. ...
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Financing Options
Student’s Name
Professor’s Name
Course Title
Date

FINANCING OPTIONS

2
Financing Options
Introduction

Investors usually give various financing options to business and it is up to the
entrepreneur or the business owner to determine and select the investor who gives the best
financing option that is friendly and less burdensome to pay back. One of the ways in which the
business can determine the best investment option is through the calculation of future value
where the present value is used (Crundwell, 2008). This case explores two scenarios that involve
an investment of the same amount for a business startup, the same payment period and interest
rate but different modes of payment. ...

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