1. You plan to borrow $100,000 at 10%, compounded annually with payments at the end of each year. The length of the loan is 10 years. How big should your annual payments be? 2. A friend has asked for your help in determining whether she should invest in a property. She tells you that the property will have annual cash flows of $1,000 during the first two years and will increase by $200 every two years. She plans to keep the property for eight years and then sell it an expected price of $60,000. She has an annual discount rate of 8% and the current market price for the property is $50,000. Should your friend invest in this property? Calculate the NPV of this investment opportunity. Which should be the required discount rate to start investing in this property? 3. Patrick has recently been approved a mortgage for a property he was interested in investing for a while. The mortgage is for a thirty-year period with a 5% annual interest rate for a total amount of $90,000. These conditions result in an annual payment (debt service) of $5,855. What will be the interest and principal payments for the first four years of the mortgage? What will be the remaining principal balance at the end of the fourth year? (Show your calculations.) 4. You have an apartment for rent. One potential tenant has promised to sign an annual lease for eight years, with each years rent (paid at the end of the year) of $12,000. Rather than make annual payments, a second tenant has offered to