Echo Systems projects that demand for its services will rise for a period of three years before subsiding. It can lease additional communication equipment for $1,400 at the beginning of every half year for three years. Alternatively, it can purchase the equipment for $12,200 at 5.50% compounded semi-annually. The salvage value of the equipment after three years is expected to be $4,900.

1. Which option would you recommend?

   	Purchase the equipment.
   	Lease the equipment.

2. In current dollars, how much better is that option? For full marks your answer(s) should be rounded to the nearest cent.

   Current dollars saved = $0.00