On January 1, Year 1, Mahoney Company borrowed $166,000 cash from Sun Bank by issuing a 5-year, 8% term note. The principal and interest are repaid by making annual payments beginning on December 31 , Year 1 . The annual payment on the loan equals $40,675. What is the amount of principal repayment included in the payment made on December 31 , Year 1? Multiple Choice $13,280 $40,675 $37,421 $27,395