Jerrys Tree Services is trying to raise debt funds from a prospective venture investors, SureWay LLC. SureWay indicated to Jerry Lau that the annual interest rate on risky venture loans is currently 15 percent. Jerry is seeking a 3-year loan with annual payments. He is willing to pay back $100,000 at the end of 3 years. However, due to cash flow problems, he can afford to pay interest at a 12 percent annual rate.