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QUESTION 3 9 Suppose a farm couple has the option to purchase 4 0 0 acres of land. Assume they are able to purchase the

QUESTION 39
Suppose a farm couple has the option to purchase 400 acres of land. Assume they are able to purchase the land for $4,000? acre. Assume a 25% down payment with the balance financed by a 30 year loan with a 7% interest rate and equal annual principal payments. What will their interest charge in year 3 be?
a. $81,200
b. $84,000
c. $40,000
d. $78,400
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