5. Feanor is in dire need of cash and borrows 10,000 from Durin. They agree to a 20-year repayment plan, where the payments are to be at the end of each year. Each of the first ten payments is equal to the 130% of the amount of interest due at the time of payment. Each of the last ten payments is a level amount of K. (J.R.R. Tolkien's Silmarillion is definitely worth reading, despite the fact that it was published after his death.) (a) Assuming that Durin charges Feanor interest at an effective annual rate of 10%, what should K be? (b) After 12 years, suspecting Feanor's motives and ability to continue the payments, Durin wants to sell the rights to the future payments a third actor. To cover his relative's liabilities, Glorfindel steps up and offers to purchase the rights to the future payments from Durin, at the exact time t = 12.5. However, Glorfindel states that he would only pay the clean price, which considers the next payment as a coupon payment of a bond. How much will Glorfindel pay