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