Alysha has decided to use her $50,000 in savings to make a down payment on a house. She will live in the house for the next two years while still at university and then sell it when she graduates. The bank has offered her a mortgage rate of 5.1 percent compounded semi-annually on a two-year term, with an amortization period of 25 years. The house she is interested in purchasing costs $280,000.
a. If two friends rent rooms from Alysha and pay her $475 each for rent at the end of each month, how much additional money does she need to meet her monthly mortgage payment?
b. In two years, Alysha wants to sell the house for a high enough price to cover the remaining principal amount on the mortgage, as well as recoup her down payment. What is the minimum sale price she should accept?