Final answer:
To calculate the monthly payment, the total interest ($675,000) is first calculated using the simple interest formula and added to the principal to get a total of $2,175,000. Dividing this amount by the number of months in 15 years gives a monthly payment of $12,083.33, which rounds to the nearest option, $12,500.
Step-by-step explanation:
First, we need to calculate the total interest that will be accrued over the 15 year period. Simple interest is calculated as Principal × Interest Rate × Time. In this case, the principal is $1,500,000, the interest rate is 3% per annum, and the time is 15 years.
Total Interest = Principal × Interest Rate × Time = $1,500,000 × 0.03 × 15 = $675,000.
The total amount to be repaid is the principal plus the total interest, which is $1,500,000 + $675,000 = $2,175,000.
To find the monthly payment, we divide the total amount by the number of months over 15 years (15 years × 12 months/year = 180 months).
Monthly Payment = Total Amount / Number of Months = $2,175,000 / 180 months = $12,083.33.
However, since we need to choose from the provided options, the closest to $12,083.33 is option C. $12,500. Therefore, the monthly payment is $12,500.