Problem 4 You are considering to buy a rental property worth $2 million. You are required to put down 30%, i.e., $600K and take a loan for the balance of $1.4 million at a xed rate of 5% over 30 years compounded monthly. The total annual rent is $100K and the total expenses are $25K. Both rents and expenses grow with an annual rate of 2%. Assume that the property appreciates in value at average aImual rate of 1%. (a) Evaluate the investment by calculating the return by assuming that you will sell the property at the appreciated value after (i) 5 years, (ii) 10 years, and (iii) 20 years, assuming that the selling expenses are 3% of the selling price. (b) Repeat (a) by assuming 3% appreciation of the property