Sauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $$150,000.$ The company can borrow $$150,000$ for three years at $10$ percent annual interest or for one year at $8$ percent annual interest.

How much would Sauer Food Company save in interest over the three$-$year life of the computer system if the one$-$year loan is utilized and the loan is rolled over $($reborrowed$)$ each year at the same $8$ percent rate? Compare this to the $10$ percent three$-$year loan. What if interest rates on the $8$ percent loan go up to $13$ percent in year $2$ and $18$ percent in year $3?$ What would be the total interest cost compared to the $10$ percent, three$-$year loan?