ADD-ON LOANS vs SIMPLE INTEREST LOANS. You are borrowing $500,000 on a 30 year, 5.5% interest loan to buy a property. 18a) What will the total interest be if it was an add-on interest loan? 18b) How much would the monthly payment be (for 30 years) if it was an add- on interest loan? 18c) What will the total interest be if it was a simple interest amortized loan? 18d) How much would be the monthly payment (for 30 years) if it was a simple interest amortized loan?

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A: Amount of home = $255,000 Down payment = 5%  The time duration of the loan = 30 years

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A: Real interest rate: Principle = $5,000 Interest = $250 Interest rate =  2505,000×100%=5%

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Q: Please correct answer and don't use hend raiting

A: If you find this answer good please rate it helpful. If any query then raise it.Thank You!

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A:

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A: PV is the current worth of cash flows that are expected to occur in future.

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.