5) Solomon wants to borrow $100,000 for 10 years and repay the loan with 10 level payments X at the end of each year. Effective annual interest rates are 8% for the first 5 years and 10% for the second 5 years.

a) Find X.

b) What is the equivalent constant interest rate? That is what would the interest rate have to be so that 10 level payments of X had a present value of $100,000?