At the end of 2014, after 5 years of hard working, John was able to purchase his first home with a deposit of $150,000. The bank agreed to lend him 80% of the value of his home for 25 years at an interest rate of 4% per annum, fixed for the first five years. After a long search, John was able to secure a two-bedroom apartment in one of the suburbs close to his work.

a) What is the price of his two-bedroom apartment assuming that he can only pay for the apartment using his own money and what the bank is willing to lend? How much does he borrow? (2 marks) b) What is his monthly repayment assuming that John wants to pay principal and interest, the first repayment happens at the end of the month and he takes out the loan on 1st January 2015? (3 marks)