Shortt & Tall, Attorneys at Law, opened their firm with $30,000 cash from investors and a $20,000 loan. During the first year of operations, the firm earned $4,000 of revenue and incurred $1,000 in operating expenses. Shortt & Tall repaid $12,000 in principal, and paid 10% interest on the balance outstanding at the end of the year.

1. How much interest did Shortt & Tall pay in Year 1?

2. What is Shortt & Tall's Net Income for the first year?