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16 <br /> Option III: payment of one half principal on January 1, 1995 <br /> and the other half on January 1, 1996 plus <br /> one-half the interest due for the January 1, <br /> 1994 through January 1, 1996 time period on <br /> January 1, 1996: <br /> Two principal payments of $21,940 plus one-half the <br /> interest. Total interest <br /> = 1994 interest + 1995 interest <br /> _ $43,880 x .03225 + $21,940 x .03225 <br /> _ $1,415.13 + $707.56 = $2,122.69 <br /> One-half interest = $1,061.35 <br /> Total for Option III: $21,940 + $21,940 + $1,061.35 <br /> _ $44,941. 35 <br /> **Capital Recovery Factor equals i(l+i) /(l+i) -1, where i = <br /> interest rate of .03225 and n = number of time periods, <br /> which is set at 18 in this example. <br />