Question 2: a. You are considering an investment of $30,000 in a financial instrument that pays 11.00% compound interest. How much less interest would you earn in a 8-year period if the interest was simple? Why is this happening? (20%) b. A big investment opportunity has appeared and in order to pursue it, your firm wants to borrow $1,000,000 for 25 years from the bank. The bank will lend the money but it requires an upfront fee of $ 65,000. The interest rate is 4.00%. How much will you be paying per year for this loan? (30%) c. You are looking at a new car. The price of the car is at $135,000. The bank offers an 9.00% APR for this loan with a duration of 6 years. You can only afford monthly payments of $800 each month, so as a solution you offer to pay off any remaining loan balance at the end of the loan in the form of balloon payment. How large should this balloon payment? In which case in the real world would a balloon payment make sense? Provide some examples. (50%)