Respuesta :
For a $500,000 loan with a 30-year term, the monthly payments will be $3,472.23 and $5,556 respectively.
Describe a loan.
A loan is when a sum of money is given to another party in exchange for the principal or value being repaid at a later time. Frequently, the lender raises the principal amount by including interest or finance charges, which the borrower must pay on top of the principal amount.
Calculations:
a) For 5%
A = 500000(1 + (0.05 × 30)) = 1250000
A = $1,250,000.00
Simple interest at a rate of 5% per year for 30 years on a principal of $500,000 accrued a total of $1,250,000.00 in principal and interest.
Your monthly payment would be $1,250,000 divided by 360 (30 years is equal to 360 months).
It'll cost $3,472.23.
b) For 10%
A = $2,000,000.00
I = A - P = $1,500,000.00
A = P(1 + rt)
First, convert R percent to r a decimal: r = R/100 = 10%/100 = 0.1 per year.
Getting the answer to our equation
A = 500000(1 + (0.1 × 30)) = 2000000 \sA = $2,000,000.00
$2,000,000.00 is the total amount accrued from simple interest on a principal of $500,000.00 at a rate of 10% per year for 30 years, including both principal and interest.
It will cost $5,556 in monthly payments.
Learn more about loans with the help of the given link:
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