John presently owns an office building, which is 30 years old, and is considering renovating it. Assume that if John does the renovation, he will be able to obtain a new loan that is equal to the balance of the existing loan plus 75% of the renovation costs. Assume a five-year holding period. Below is the information about the property and Johns estimation if he does the renovation.

What is the mortgage balance by the end of year 8 if John does renovate the property? (Choose the nearest value)

Group of answer choices

a.$1,152,233

b. $1,003,848

c. $965,662

d. $954,230