Answer:
The principal paid off in year two $21,318.27  
Explanation:
The arrangement for equal amount payable yearly to pay off the entire loan obligation (principal plus interest) is an annuity for 15years at 3.6%.
An annuity is a series of equal payment payable annually for certain  number of years where interest is charged at a particular rate.
We can work out the annual equal installment using the Present Value (PV) annuity formula below:
PV = A ×( (1- (1+r)^(-n))/r)
<em>So we can apply this formula to the question</em>
  PV - 400,000, r =3.6%= 0.036, n -15, A is equal instalment, not given.
400,000 = A ×( 1- (1.036)^(-15))/0.036
400,000 = A × 11.4359
A= 400,000/11.4359
A =34,977.47
Equal annual installment =$34,977.47
Now with the help of an amortization table we ascertain the amount of principal paid off in year 2:
Amortization Schedule
Bal @ beginning	Interest    Installment	Principal Paid	Principal bal.
A	                      B  = A *3.6%	C	            D= C - B      E =A-D
 400,000.00   14,400.00   34,977.48   20,577.48   379,422.52 
 379,422.52   13,659.21   34,977.48   21,318.27  
The amortization table is a schedule showing how the loan would be paid over the loan period.
Note that the columns are labelled as A, B, C, D and E starting from the left hand-side respectively
The principal paid off in year two is $21,318.27 which is the bolded figure in  column D,