You need a fixed-rate mortgage to buy a new home. Your mortgage bank will lend you the money with parameters of the loan shown below.

Amount borrowed	$600,000
APR	4.00%
Payment/compounding frequency	12	per year
Loan maturity	360	months

a. What are your monthly payments?

b. You can afford only a limited monthly payment of $1,750 and you offer to pay off the remaining balance at the end of the loan in the form of a single balloon payment. What is this balloon payment?

c. You are not happy with results in b. (why?) and decide that your monthly payment should at least be enough to cover the monthly interest. What is the monthly payment in this case? How much will you have to pay in the form of balloon payment at the end?