1. Ann borrows $50,000 and may repay the loan in the following two options: 1) Level payments at the end of each quarter for 20 years with 10% nominal interest rate per year convertible quarterly; 2) Interest payments to loan lender and level deposits into a sinking fund to repay the principal at the end of each quarter for 10 years. The sinking fund earns i nominal interest rate per year convertible quarterly. The lender receives 12% nominal interest rate per year convertible quarterly. The total payments over 20 years under option (2) are 20,000 less than the total payments under option (1). Calculate i. (15 marks)