you have to replace a copy machine and you have 2 offers. both offers 3 year leases. offer 1 requires an up-front payment of $1700 with additional payments of $1200 at the beginning of years 2 and 3. The firm is also charged one-half of 1 cent, ($0.005), for each sheet printed, payable at the end of the year. offer 2 has no up-front cost. its lease payment is $1300, payable at the beginning of the year and the per sheet charge is 1 cent ($0.01) payable at the end of each year. you estimate that monthly use of the copy machine will be 1500 copies.

Question

you have to replace a copy machine and you have 2 offers. both offers 3 year leases. offer 1 requires an up-front payment of $1700 with additional payments of $1200 at the beginning of years 2 and 3. The firm is also charged one-half of 1 cent, ($0.005), for each sheet printed, payable at the end of the year. offer 2 has no up-front cost. its lease payment is $1300, payable at the beginning of the year and the per sheet charge is 1 cent ($0.01) payable at the end of each year. you estimate that monthly use of the copy machine will be 1500 copies.
Determine an appropriate discount rate and discount the cash flows for each lease. choose the best lease based on which lease costs less in present value terms.

Answer:
option 1
interest 10% assumed
time 0  1700
time 1  1200
time 2  1200
time 3  0
using the financial calculator NPV=3782.64

0.005*1500*12=90
pmt=90, n=3, I=10%  pv=223.82

pv=3782.64+223.82=4006.46

option 2
time 0  1300
time 1  1300
time 2  1300
time 3  0

beg pmt=1300 n=3 I=10%  
pv=3556.20

0.01*1500*12=180
PMT=180  n=3  I=10%  PV=447.63
 option 2= 3556.2+447.63=4003.83

please tell me my mistake as both seems equal