Kuznets Rental Center requires $500,000 in financing over the next two years. Kuznets can borrow long-term at 8 percent interest per year for two years. Alternatively, Kuznets can borrow short-term and pay 6 percent interest in the first year. Then, Kuznets projects paying 9 percent interest in the second year. Assuming Kuznets pays off the accrued interest at the end of each year, which of the following statements is true? A. Kuznets will probably pay less under the short-term financing plan. î©”
B. Kuznets will definitely end up paying more under the long-term financing plan. î©–
C. Kuznets will definitely end up paying less under the long-term financing plan. î©–
D. Kuznets will probably pay more under the short-term financing plan.