A loan of $60,000 is due 10 years from today. The borrower wants to make annual payments at the end of each year into a sinking fund that will earn compound interest at an annual rate of 10 percent. The sinking fund with interest earnings will be used to repay the loan at maturity.

1.) What would annual payments have to be in order to accumulate $60,000 at the end of 10 years to repay the loan? (5 points)

2.) Suppose that instead of annual payments, the borrower can make monthly payments that will earn 10% interest compounded monthly. What would the monthly payments have to be to accumulate the $60,000? (5 points)

3.) Compare the total of all 10 annual payments in (1) with the total of all 120 monthly payments in (2). Which would require the lower total cash outflow? (6 points)