Prepare solutions to the following problems and submit them as instructed by your section instructor. Show all calculations, to support the solutions you submit. John is purchasing a house for $500,000. He plans to make a down payment of $100,000 and take out a 30-year mortgage for $400,000. If the interest rate on the house is 3.25 percent per year, how much will his monthly payment be for principal and interest. If the interest rate is the same, how much would his monthly payment for principal and interest be if he took out a 15-year mortgage? Note: Normally, a 15-year mortgage would carry a lower interest rate. The interest rate here is held constant to simplify the problem. How much interest will John save in total with the 15-year mortgage?

Separate calculations for each item (e.g. separate for principal and separate for interest) for each part please.