To finance the purchase of a new house, a homebuyer takes-out a partially amortizing loan in the amount of $600,000 at 6% interest per year, compounded monthly. A balance of $200,000 will remain and is to be paid-off as a lump sum when the term expires in 20 years.

(a) What are the monthly mortgage payments the homebuyer must make to the lender?

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

(c) At the end of year 5, the market rate of interest is 12%. What is the market value of the loan at the end of 5 years?

(d) If this loan were to be sold at market value at the end of year 5, would this loan be sold at a discount?