You have decided to become a student landlord and plan to buy a house for $920,000. You parents have agreed to supply $200,000 to be used as a down payment, leaving $720,000 to be financed by means of a mortgage. The mortgage broker has quoted 5.25% quoted rate based on a 25-year amortization, which will be compounded semi-annually in accordance with Canadian law.

Required:

a) What would be the amount of monthly payments on the mortgage?

b) What would be the principal outstanding after five (5) years?