Tom just graduated from Imperial and landed a nice job as a product manager at a big tech firm. He is short on cash from all the traveling he did during business school but wants to live like a big shot. He finds a small house for sale at a price of a million dollars (yes, this is California) and is determined to purchase it. Unfortunately, his two years at Imperial have emptied his savings account. However, the bank is offering a special mortgage that involves only a 5% down-payment and an APR interest rate of 4.0% (compounded monthly) for 30 years. Tom can easily cover the down-payment with his sign-on bonus, but he is worried that the monthly payment will be too high. Given the characteristics of the mortgage loan, how much will Tom need to set aside every month in order to afford his new home? 4