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.)