You have just purchased and have obtained a 30-year, $2 mortgage with an interest rate of 10 percent. required: a. what is your annual payment? b. assuming you bought the house on january 1, what is the principal balance after one year? c. after four years, mrtgage rates drop to 8 percent for 30-year fixed-rate mortgages. you still have the old 10 percent mortgage you signed four years ago and you plan to live in the house for another five years. the total cost to refinance the mortgage is $3000, including legal fees, closing costs, and points. the rate on a five-year cd is 6 percent. should you refinance your mortgage or invest the $3,000 in a cd? the 6 percent cd rate is your opportunity cost of capital.

scenario: hawaii and south carolina are trading partners. hawaii has an absolute advantage in the production of both coffee and tea. the opportunity cost of producing 1 pound of tea in hawaii is 2 pounds of coffee, and the opportunity cost of producing 1 pound of tea in south carolina is 1/3 pound of coffee. which of the following statements is true? a. south carolina should specialize in the production of both tea and coffee. b. hawaii should specialize in the production of tea, whereas south carolina should specialize in the production of coffee. c. hawaii should specialize in the production of coffee, whereas south carolina should specialize in the production of tea. d. hawaii should specialize in the production of both tea and coffee.