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Q3-You must borrow $10,000 for five years with interest rate @ 8%. You have two options: 1. Option A: Under this option, you amortize the loan with annual payments: (a) Determine the present value of the interest payments with option A. (10 pts.) (b) Determine the present value of the principal repayments with option A. (10 pts.) 2. Option B: Under this option, you pay off the loan in its entirety after five years. (a) Determine the present value of the interest payments with option B. (10 pts.) (b) Determine the present value of the principal repayments with option B. (10 pts.) 3. Under which loan arrangement you would you pay the most interest (adjusted by the present value)? (5 pts.) 4. Under which loan arrangement you would you pay the most principal (adjusted by the present value)? (5 pts.) 5. Explain why you would expect the present value of the interest and principal differ between these two loan arrangements? (5 pts.)