1. **State the problem:** Ed borrows 500000 for 25 years at an annual interest rate of 2.74%, compounded monthly. We need to find his monthly payment. 2. **Identify variables:** - Principal $P = 500000$ - Annual interest rate $r = 0.0274$ - Number of years $t = 25$ - Number of payments per year $n = 12$ 3. **Calculate monthly interest rate:** $$ i = \frac{r}{n} = \frac{0.0274}{12} = 0.0022833 $$ 4. **Calculate total number of payments:** $$ N = n \times t = 12 \times 25 = 300 $$ 5. **Use the mortgage payment formula:** $$ M = P \times \frac{i(1+i)^N}{(1+i)^N - 1} $$ 6. **Calculate $(1+i)^N$:** $$ (1 + 0.0022833)^{300} \approx 2.0304 $$ 7. **Calculate numerator:** $$ 0.0022833 \times 2.0304 = 0.004634 $$ 8. **Calculate denominator:** $$ 2.0304 - 1 = 1.0304 $$ 9. **Calculate monthly payment $M$:** $$ M = 500000 \times \frac{0.004634}{1.0304} = 500000 \times 0.004497 = 2248.5 $$ **Final answer:** Ed's monthly payment is approximately $2248.50$.