Jeffrey has decided to use his $50,000 to make a down payment on a $300,000 house. He plans to live in the house for the next three years while still at university, and then sell it when he graduates. Jeffrey is a client of TD Bank and the bank has offered him a mortgage rate of 4.5% on a three-year term, with an amortization period of 25 years. a. If Jeffrey rents two rooms in the house to other students at $500 per room, payable at the end of each month, how much additional money must he pay to meet his monthly mortgage payment?

b. What is the total interest paid to TD Bank over the next three years?

c. In three years, Jeffrey plans to sell the house for a high enough price to make his house ownership over these three years profitable (i.e., to have a positive NPV). What is the minimum sale price he should accept? Assume that Jeffreys opportunity cost of capital is effective 6% per year. Ignore brokers commission on sale, utility bills, repairs, insurance, etc.