On January 1, Year 1, Mahoney Company borrowed $172,000 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 $40,825. What is the amount of principal repayment included in the payment made on December 31 , Year 1 ? Multiple Choice $13,760 $40,825 $37,559 $27,065