Question 2 (15 marks)

John wanted to purchase a house at price $7million. He planned to borrow 80% of the total amount through mortgage loanprovided by HSBC. HSBC charged him an annual interest rate at Prime Rate minus 4% and he had to pay off the loan in 25 years. The first payment was made one month after the purchase whenthe prime rate was 8%. 10 years later, HSBC adjusted the prime rate to 10%.

What is the monthly payment during 10th year to 25th year?