1. In 2012 you purchased a small office building for $450,000, which you financed with a $337,500 fixed-rate, 25 year mortgage. Up-front financing costs totaled $6,750. How much of this upfront financing expense could be written off against ordinary income in 2012? show work.
2. Five years ago you invested $16561 at a 5% market interest rate.
If the inflation rate is 4%, what is the current constant dollar value of your investment?