Q2.7: Morgan purchased a house for $400,000. He made a downpayment of 15% of the value of the house and received a mortgage for the rest of the amount at 5.25% compounded semi-annually for 20 years....

Q2.7:
Morgan purchased a house for $400,000. He made a downpayment of 15% of the value of the house and received a mortgage for the rest of the amount at 5.25% compounded semi-annually for 20 years. The interest rate was fixed for a 5-year term.

a. Calculate the size of the monthly payments.

b. Calculate the principal balance at the end of the 5-year term.