An investor has $$70,000$ to invest in a $$310,000$ property. He can either obtain a $$240,000$ loan at $9\mathrm{.}6$ percent for $20$ years or a $$190,000$ loan at $9$ percent for $20$ years and a second mortgage for $$50,000$ at $13$ percent.

Required:

Calculate the effective cost of the combined loans if the second mortgage is for $20$ years and identify the best alternative for the borrower.

Calculate the effective cost of the combined loans if the borrower plans to own the property for only five years and identify the best alternative for the borrower.

Calculate the effective cost of the combined loans if the term is $10$ years and identify the best alternative for the borrower.