Novak Incorporated provides solar energy services to Toronto. Novak needed to buy additional solar energy panels to meet the demand for its energy product. The Government of Ontario offered an interest$-$free forgivable loan to Novak in the amount of $$400,000.$ The loan will be forgiven if Novak is able to produce a stated number of kilowatts of energy per year for the next five years. If these conditions are not met, the amount is due to the government in full in five years. Novak believes it will be able to meet the conditions. Novak recently obtained a similar loan from the bank with an annual interest rate of $9\%.$

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