Question: Question 3: (Total 15 marks) You would like to purchase a new home for $4.5million. You have obtained a 30-year mortgage loan from a bank

Question 3: (Total 15 marks)

You would like to purchase a new home for $4.5million. You have obtained a 30-year mortgage loan from a bank with annual interest rate 4%. However, you can afford monthly payment of only $12,000, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single bullet payment.

How large will this bullet payment have to be for you to keep your monthly payments at $12,000?

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