Question: 2) Tom and Sandra are considering buying a house valued at $350,000. They have combined savings of $30,000, and the bank approved a mortgage at

2) Tom and Sandra are considering buying a house valued at $350,000. They have combined savings of $30,000, and the bank approved a mortgage at $300,000. Another bank approved them for a $20,000 second mortgage. If they invested their money in guaranteed certificates, they would be able to earn 4%. The interest rates offered at the banks were 6% for the first mortgage and 7% for the second. Calculate their cost of capital.

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