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Man-Duen has an interest only loan for $120,000.00 maturing in 15 years. The interest rate on the loan is 8.500% compounded annually. He will repay

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Man-Duen has an interest only loan for $120,000.00 maturing in 15 years. The interest rate on the loan is 8.500% compounded annually. He will repay the loan by making quarterly interest only payments, and by also making quarterly deposits of $873.28 into a sinking fund paying r(52) = 10.000%. If he defaults just after making 54 loan payments, and the lender gets the balance in the sinking fund, how much money does the lender lose? O a. $25,806.76. Ob $25,161.60. O c. $27,312.16. O d. $27,957.33. O e. $21,505.64. Certainty : OC=1 (Unsure: 67%) OC=3 (Quite sure: > 80%)

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