Oracular Consulting is planning to purchase $1,000,000 in computer equipment and software to upgrade the main server and our web presence. Since we do not want to reduce our liquid assets by this amount, we are considering several different loan possibilities. The terms of these loans are described below.

Analyze the four loans and provide a well-reasoned recommendation as to which loan (or loans) would be the best choice. It would certainly be nice to choose a loan that we can pay off as quickly as possible, but that may require very high monthly payments. If we are willing to pay large monthly payments, then we can take a short term for the loan, but if we need to lower the payments, we need to make a decision on some other characteristics. The three obvious ones are to compare the length of the loan, the total interest paid over the lifetime of the loan, or the monthly equivalent payments for the loan (the amount we pay each period, pro-rated to a monthly budget amount).

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