Gabriel Health Services Ltd. requires $1.5 million in financing over the next two years. The firm can borrow at 5 percent per year over the two years. However, with some economic forecasting, it has been suggested that financing in the first year will be 3.5 percent and 6.25 percent in the second year.

Determine the total interest charges under both possibilities.(Enter answers in whole dollar, not in million.)

a. total interest cost in Fixed cost financing

b. total interest cost in Variable short-term financing