Answer all parts of the question

Pedro has $20,000 to invest in a $230,000 home. Alternatively, he can obtain either a $210,000 single loan at 7.5% for 40 years or a combined loan of $180,000 loan at 8% for 20 years and a second mortgage of $60,000 at 12% for 40 years.

What is the effective cost of the combined loan?

What type of loan is preferable?

combined loan

single loan

no difference

none of the above

What would be the monthly payment of the single loan, assuming monthly amortization?