Question: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $200 for the phone and monthly charges of $60

You are trying to decide between two mobile phone carriers.

Carrier A requires you to pay $200 for the phone and monthly charges of $60 for 24 months. Carrier B wants you to pay $100 for the phone and monthly charges of $70 for 12 months. Assume you will keep replacing the phone after your contract expires.

Your cost of capital is 3% APR, compounded monthly.

How much is the PV0 of cost of the more expensive carrier over 24 months?

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