20-3. Hank Scorpio is considering borrowing $20,000 for a year from a bank that has offered the following alternatives: a. An interest payment of $1,800 at the end of the year b. An interest payment of 8 percent of $20,000 at the beginning of the year c. An interest payment of 7.5 percent of $20,000 at the end of the year in addition to a compensating balance requirement of 10 percent (i) Which alternative is best for Ralph from the effective-interest-rate point of view? (ii) If Ralph needs the entire amount of $20,000 at the beginning of the year and chooses the terms under part c , how much should he borrow? How much interest would he have to pay at the end of the year?