Boatler Used Cadillac Company requires $$930,000$ in financing over the next two years. The firm can borrow the funds for two years

at $10$ percent interest per year. Ms$.$ Boatler decides to do forecasting and predicts that if she utilizes short$-$term financing instead, she

will pay $6\mathrm{.}75$ percent interest in the first year and $11\mathrm{.}55$ percent interest in the second year. Assume interest is paid in full at the end of

each year.

a$.$ Determine the total two$-$year interest cost under each plan.

b$.$ Which plan is less costly$?$

Long$-$term fixed$-$rate plan

Short$-$term variable$-$rate plan