can you explain for me how we get 16,000$ in total payment equation at method 2

4.5 Three Loan Payment Methods (continued) Example 6: Discount versus Interest-only versus Amortizd loans Roseanne wants to borrow $40,000 for a period of 5 years. The lenders offers her a choice of three payment structures: 1) Pay all of the interest ( 10% per year) and principal in one lump sum at the end of 5 years; 2) Pay interest at the rate of 10% per year for 4 years and then a final payment of interest and principal at the end of the 5th year; 3) Pay 5 equal payments at the end of each year inclusive of interest and part of the principal. Under which of the three options will Roseanne pay the least interest and why? Calculate the total amount of the payments and the amount of interest paid under each alternative. 4.5 Three Loan Payment Methods (continued) Method 1: Discount Loan. Since tall the interest and the principal is paid at the end of 5 years we can use the FV of a lump sum equation to calculate the payment required, i.e. FV=PV(1+r)nFV5=$40,000(1+0.10)5 4.5 Three Loan Payment Methods (continued) Method 2: Interest-Only Loan. Annual interest Payment (Years 1-4) =$40,0000.10=$4,000Year5payment=Annualinterestpayment+Principalpayment=$4,000+$40,000=$44,000Totalpayment=$16,000+$44,000=$60,000Interestpaid=$20,000