1.To finance the purchase of a new home, a homebuyer takes-out a fully amortizing loan in the amount of $600,000 at 6% interest per year, compounded monthly, for a term of 20 years.

(a) What are the monthly payments the borrower must make to the lender? (5 points)

(b) What is the outstanding balance of the loan at the end of 8 years? (5 points)

(c) At the end of year 8, the market rate of interest is 8%. What is the market value of the loan at the end of 8 years? (5 points)

(d) If this loan is sold at market value at the end of year 8, is this loan sold at a discount?