Sovereign Debt Negotiations.A sovereign borrower is considering a $100 million loan for a 4-year maturity. It will be an amortizing loan, meaning that the interest and principal payments will total, annually, to a constant amount over the maturity of the loan. There is, however, a debate over the appropriate interest rate. The borrower believes the appropriate rate for its current credit standing in the market today is 10%, but a number of international banks with which it is negotiating are arguing that is most likely 12%, at the minimum 10%. What impact do these different interest rates have on the prospective annual payments?

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Part 1

The annual payment, if the interest rate was 10%, is $enter your response here. (Round to

the nearest dollar.)

The annual payment, if the interest rate was 10%, is $enter your response here. (Round to

the nearest dollar.)

What impact do these different interest rates have on the prospective annual payments? (Round to the

nearest dollar and select from the drop-down menus).