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You plan to borrow money from your grandmother to start a new chocolate candy business. You...

You plan to borrow money from your grandmother to start a new chocolate candy business. You agree to make one payment of $100,000 at the end of 6 years and negotiate an interest rate of 7%. Your grandmother has offered to reduce the interest rate if you will pay her the $100,000 in 5 years (instead of 6 years). Assuming your grandmother will lend you the present value of the final payment, will the amount that she lends you increase or decrease if you agree to pay in 5 years in exchange for a lower interest rate.

A)The amount that she lends you will increase

B)The amount that she lends you will decrease

C)It depends on whether the interest rate changes enough to outweigh the shorter period before you repay your grandmother

Please also explain why you choose the answer

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