In order to entice buyers, a builder is offering $250,000 conventional mortgage loans on new home sales at 5.00% fixed to be amortized over 30-year terms. Current market rates for 30-year fixed-rate mortgage loans to borrowers of excellent credit are 6.50%. The homes being marketed have a competitive market value of $312,500 without any special (discounted) financing. 1. At what price should the builder sell the properties (disregarding marketing, transaction, and closing costs) to earn a/the market rate return of 6.50% in the loan (assuming the builder - or the builder's children must hold the loan(s) for the entire loan term? 2. How would the answer to question 1 change if the builder assumes that homes will be resold after an average period of 10 years, at which time loans will be repaid?