On December 1, Year 1, Bradley Corporation incurs a 10-year $320,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $3,600, which include interest computed at the rate of 12% per year. The first monthly payment is made on December 31, Year 1.

Over the 10-year life of the mortgage, the total amount Bradley will pay for interest charges is:

Multiple Choice

• $112,000.

• $432,000.

• $320,000.

• $360,000.