Your company has negotiated the following terms with a local bank to purchase a corporate small villa with a listed price of $200,000. The required down payment is 25% of the listed price, and the bank will finance the difference. The mortgage terms are: 30 years, at a fixed loan rate of 3.5%, end-of-period monthly payment.

a) What is the monthly mortgage payment?

b) What is the first month interest payment? [Hint: interest payment is calculated on the initial or successive remaining balances, using simple interest.]

c) What is the first month payment toward the principal?

d) If your company can afford a monthly payment of $500 only, estimate the mortgage loan that the bank would be able to make, consistent with this requirement and all else being equal?