To encourage investment in the country, the New Zealand government is offering loans at a favourable rate to foreign investors. The government is willing to provide a NZD 10 million loan at a rate of 5%, although the market interest rate is 14%. Assuming the loan is paid off in equal annual instalments over a 5 year-period and interest is paid on the remaining principal value, what is the (before-tax) value of this interest subsidy?

(Tip: filling out the table below will help you to find the final answer.

YEAR	Principal	Interest Diff.	Present Value	Total NPV
1
2
3
4
5