Problem 5 You are about to build a new plant and need a construction loan to do so. You plan on rolling the interest into the loan, and once the plant is complete, the loan will convert into a conventional (P&I) loan. Here's the expected cost schedule: 1/1 - Purchase the land - $600,000 1/10 - Grade and pour the foundations - $400,000 2/1 - Frame in the building - $1,000,000 3/15 - Do plumbing and electrical work - $500,000 6/1 - Drywall - $800,000 8/15 - A/C and Ductwork - $500,000 You expect construction to be complete by 9/1, at which time the loan would convert to a conventional P&I. The construction loan carries an interest rate of 8%, Interest is accrued monthly, based on daily average balance. How much will the P&I loan have as a starting amount