3. You've purchased your first home. The property taxes on it are $3,500 per year. The mortgage agree- ment stipulates that you must pay 1/12 of the annual taxes each month into an escrow account so that the taxes can be paid in full on April 1. Your first payment is at the end of April and the last payment is at the end of March of the following year. Assume that cost of money is 6.5% nominal annual interest, compounded monthly a. Draw the cash flow diagram for one year. b. What is the effective annual interest rate (in %)? c. Determine how much profit (in S) the mortgage company makes each year on the owner's tax money. Profit in this case is the difference in the sum of the amount you pay into the escrow ac- count and the amount paid in property taxes. 3. You've purchased your first home. The property taxes on it are $3,500 per year. The mortgage agree- ment stipulates that you must pay 1/12 of the annual taxes each month into an escrow account so that the taxes can be paid in full on April 1. Your first payment is at the end of April and the last payment is at the end of March of the following year. Assume that cost of money is 6.5% nominal annual interest, compounded monthly a. Draw the cash flow diagram for one year. b. What is the effective annual interest rate (in %)? c. Determine how much profit (in S) the mortgage company makes each year on the owner's tax money. Profit in this case is the difference in the sum of the amount you pay into the escrow ac- count and the amount paid in property taxes