Mr. Roth/TTM Projects Pty Ltd applies for a medium-term loan (5 years) of $4 000 000 to purchase specialized machinery which would expand the production capacity of his business substantially and $3 000 000 additional overdraft facilities to augment the working capital requirements as a result of the expansion. The business TTM Projects Pty Ltd specializes in the manufacturing of electrical and electronic components for the automotive industry.

Mr. Roth (the only shareholder of the company) offers a second mortgage bond over his residential property for $2 000 000. (The realistic market value of the property is $3 250 000 according to a valuation recently done by the bank. The first bond to the value of $2,500,000 in favour of your bank secures the existing debt pertaining to the residential property.) 

Determine the collateral value of the second bond that Mr. Roth offers over his personal residential property.