A startup company has developed a new mobile app tha thas the potential to disrupt the market.  The company is seeking funding to launch and market the app.  The company is considering two financing options:  equity financy wiht a venture capital firm that offers a valuaiton of $10m an debt financing with a bank at an interest rate of 10% over a five year term.  What is the total interest expense for the bank loan over the five year term if the copany borrows $2m $100,000 $200,000 $300,000 $400,000

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter1: Introduction To Finance For Entrepreneurs
Section: Chapter Questions
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A startup company has developed a new mobile app tha thas the potential to disrupt the market.  The company is seeking funding to launch and market the app.  The company is considering two financing options:  equity financy wiht a venture capital firm that offers a valuaiton of $10m an debt financing with a bank at an interest rate of 10% over a five year term.  What is the total interest expense for the bank loan over the five year term if the copany borrows $2m

$100,000

$200,000

$300,000

$400,000

Please provide detail regaridng answer.  I believe it is $200,000 but answer key shows $300,000 and I am not seeing how possible 

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