Final answer:
The monthly payment for the simple interest loan in November is $5,000, and for the add-on interest loan, it is $53,500. The simple interest is calculated monthly based on the annual rate, and the principal is paid back at year's end. For the add-on interest loan, the interest for the year is calculated upfront, added to the principal, and then divided by 12.
Step-by-step explanation:
To determine the monthly payment for each loan for November, we need to calculate the payments for both the simple interest loan and the add-on interest loan. First, let's consider the simple interest loan at 10%. For this loan, interest for one month is calculated by taking the annual interest rate, dividing it by 12 (since there are 12 months in a year), and then multiplying by the loan amount. The principal is paid at the end of the year, so no principal repayment is included in the monthly payment.
The calculation for the monthly interest payment is:
(0.10 / 12) * $600,000 = $5,000.
Now, let's calculate the add-on interest loan at 7%. Add-on interest means that the interest is calculated at the beginning on the entire loan amount, then added on top, and the total is then divided by the number of months to repay. The interest for the entire year would be:
(0.07 * $600,000) = $42,000.
Adding this to the original loan amount gives us $642,000, which is then divided by 12 to get the monthly installment:
$642,000 / 12 = $53,500.
So, the monthly payment for the simple interest loan in November is $5,000, and the monthly payment for the add-on interest loan is $53,500.