Read the situation and using the information provided, structure two loan options for the Smiths.

Adam and Marie Smith are trading in their automobile for a new one and need an additional $8,500 for the new auto, plus $1,500 to pay off the balance on the old auto's loan.

They have the following debts:

LOAN	Monthly Payment	Balance	APR	Term
Second Mortgage	$175	$9,000	12.5%		120 months
Boat	350	17,500	13.0	120 months
Automobile	125	1,500	9.5	revolving
Visa	20	400	18.0	revolving
MasterCard	45	900	18.0	revolving
Department Store	15	300	21.0	revolving
Department Store	25	500	16.0	revolving
TOTAL	$755	$30,100

METRO City Bank Rate Sheet

Loan type	Term	Collateral	APR
New Auto	48 months	New auto	6.5%
New Auto	60 months	New auto	7.5%
Home equity, fixed-rate closed-end	Up to 120 months	Home	6.0%

Option A:

Option B: