You have to make a major piece of equipment purchase today but there is no money to cover it right now. The vendor can provide you with vendor-finance for this project and has determined that the price he can sell it to you right now is $20,000 today, including a financing fee of 1% and delivery and set up charge of $2,000. Assume a 4% yearly simple interest rate. Your bank can also provide you with a 30K loan now @5% simple yearly interest over 4 years with a commitment fee of 0.5%. What option is better? How much do you need to pay each year over the next 4 years to be equal to 20K now, assuming 4% compounded interest?