Question: Please type the answer by computer, so i can see it clearly, thank you!!! You have $400,000 to invest in a $3,000,000 Mong Kok residential

Please type the answer by computer, so i can see it clearly, thank you!!!

You have $400,000 to invest in a $3,000,000 Mong Kok residential property and must choose between the following fully amortizing monthly mortgages.

(i) a $2,600,000 loan at 6% for 10 years and

(ii) a $1,000,000 loan at 5% for 10 years and a second mortgage for $1,600,000 at 6.5% for 10 years.

Question:

Which alternative would you choose and why?

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