Exercise 10-1A (Algo) Interest only versus an installment note LO 10-1 Sanders Company is planning to finance an expansion of its operations by borrowing $48,600. City Bank has agreed to loan Sanders the funds. Sanders has two repayment options: (i) to issue a note with the principal due in 10 years and with interest payable annually or (2) to issue a note to repay $4,860 of the principol each year along with the annual interest based on the unpoid principal balance. Assume the interest rate is 11 percent for each option. Required a. What amount of interest will Sanders pay in Year 1 under option 1 and under option 2? b. What amount of interest will Sanders pay in Year 2 under option 1 and under option 2? c. Which option is less costly in the long fun? Complete this question by entering your answers in the tabs below