1. A loan was made 10 years ago for $140,000 at 6.5% for a 30 year term and monthly payments. Rates are currently 8.25%. What is the market value of the loan?

2. You will need to replace the boiler for your apartment building in 3 years. The current cost of replacing the boiler is $40,000 and you believe this cost will increase at the rate of inflation (5%). How much will you need to set aside at the end of each month so that you will be able to replace the boiler in 3 years assuming you can earn 3%?