Given property purchase price of $800,000 and a down-payment of $200,000. The effective annual rate payment on the mortgage is 4.04%.

1.Determine the "net" future gain or loss after 2, 5 and 10 years under the following scenarios, which the owner has determined are possible after some "due diligence" regarding future real-estate prices in the market:

a. The property price remains unchanged.

b. The property price drops 10 per cent over the next two years, then increases back to its purchase price by the end of five years, then increases by a total of 10 per cent from the original purchase price by the end of 10 years.

c. The property price increases annually by the annual rate of inflation of 2 per cent per year over the next 10 years.

d. d. The property price increases annually by an annual rate of 5 per cent per year over the next 10 years.

2. As the owner, what decision would you make? Describe any qualitative considerations that could factor into your decision.