1) A home buyer buys a house for $1,427,000. She pays? 20% cash, and takes a? fixed-rate mortgage for ten years at 6.25?% APR. If she makes? semi-monthly payments, which of the following is closest to each of her? payment?
a. $5,122.37
B. $7,683.55
C. $7,043.26
D. $6,402.96
2) You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $215 for the phone and then monthly charges of $64 for 24 months. Carrier B wants you to pay $115 for the phone and monthly charges of $72 for 12 months. Assume you will keep replacing the phone after your contract expires. Your cost of capital is 3.9%. Based on cost? alone, which carrier should you? choose?
Based in cost alone you will choose
Carrier A
Carrier B