Suppose that you are considering an investment in an apartment building. Use the information provided

below to answer the questions that follow:

Type of Property: Apartment building

Number of Units: $30$

Average Rent $($Year $1)$: $$1,500$ per unit per month

Annual Growth in Average Rent: $5\%$

Vacancy and Collection Losses: $5\%$ of Potential Gross Income

Other Income $($Year $1)$: $$50$ per unit per month

Annual Growth in Other Income: $3\%$

Operating Expenses: $35\%$ of Effective Gross Income

Capital Expenditures: $4\%$ of Effective Gross Income

Selling Expenses: $5\%$ of Future Selling Price

Going$-$Out Cap Rate: $6\mathrm{.}5\%$

Expected Purchase Price: $$5\mathrm{.}25$ million

Loan Terms: Loan Amount: $85\%$ of Purchase Price

Interest Rate: $4\mathrm{.}5\%$ per year with monthly payments and monthly compounding

Amortization Term: $30$ years

a$)$ What is the annual debt service in year $1($Round your answer to two decimal places$)?$

b$)$ What is the annual debt service in year $2($Round your answer to two decimal places$)?$