Another investor has proposed putting up $500,000$ but this investor wants the money to be paid back over ten years at $50,000$ per year in principle plus $10\%$ per annum interest on the outstanding loan balance. Payments would be made once a year, at the end of the year.

Question $1$: How much interest will the investor who earn his loan to the company? Show the calcuations.

Question $2$: Which of the two alternatives is riskier for the company? What are those risks?

Question $3$: Which of the two alternatives is riskier for the investor? What are those risks?