1. You have agreed to purchase a small apartment building that has ten 1 bed-room apartments for $750,000 a) Suppose you wish to finance the purchase with a mortgage and the bank indicates it is willing to provide a loan equivalent to 80% of the value, what is the size of the loan? (5 points) b) If the bank is pricing the loan as a fixed rate mortgage with an interest rate of 7%, for 25 years, what is your total monthly principal and interest payment? (5 points) c) What is the outstanding balance of loan at the end of year five? (5 points) d) If you expect the property to appreciate 10% per year over the five years and you decide to sell the property, what will be the value at that time? (15 points)