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A businessman went to the bank for a loan and the bank gave him two options: Option 1: 8-year loan of 40,000 at 6.25%, per

A businessman went to the bank for a loan and the bank gave him two options:

Option 1: 8-year loan of 40,000 at 6.25%, per year requiring monthly repayments.

Option 2: Revolving line of credit of 20,000 at 6 % per year.

Which one should he consider? Explain with detailed calculation.

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