A local famer wish to borrow $35,000 from a local lending business at an interest rate of 11.5% p.a. compounded monthly. The famer, who is your uncle approached you and asked for your advice as he is unsure whether his loan should be for duration of 15 or 20 years.

a). Give an advice for the old man, clearly indicating which of the two proposed term is considered beneficial and the reason (s) for your answers

b).If the old man decided to take the loan for over 15 years period, what would be the balance after 5 year