This is not my best area of math, so don't take my word for it, but here's what I got:
I think the interest rate applies to amount of money that is borrowed.
Then apply the interest on what is borrowed as often as needed (2 times a year) but subtract
That means the amount of money borrowed at each year is:
0) (start) 2,800,000 - 300,000 = 2,500,000
2,500,000*1.045^2 = 2,730,062.5
1) 2,730,062.5 - 700,000 = 2,030,062.5
2,030,062.5*1.05^2 = 2,238,143.91
2) 2,238,143.91 - 800,000 = 1,438,143.91
1,438,143.91*1.05^(2/0.5) = 1,748,072.91
4) 1,748,072.91 - 1,000,000 = 748,072.91
748,072.91*1.055^2 = 832,623.85
Then it says at year 5, increase final payment by 10%.
5) 832,623.85* 110% = 915,886.24
I'm guessing this means the final payment would be $915,886.24
But it says twelve months from now, so maybe it wants you to say what is owed after the first year?
If that's the case,it would be $2,730,062.5 before making the prescheduled payment of $700,000.
I don't know for sure, and check my work.
