Companies frequently borrow money under anarrangement that requires them to make periodicpayments of "interest only"and then pay the prin-cipal all at once. If Cisco International borrowed$500,000 (identified as loan A) at 10% per yearsimple interest and another $500,000 (identified asloan B) at 10% per year compound interest andpaid.
only the interest at the end of each year for3years on both loans,

a) on which loan did thecompany pay more interest,and

b) what was thedifference in interest paid between the two loans