(a) interest rate: 0.2660%, final benefit: $355.63

(b) interest rate: 0.1330%, final benefit: $175.07

[QUESTION] Would the benefit (b) be larger or smaller if Donald had stuck with the higher interest rate from before the renegotiation? and why?

a. Larger benefit, since a higher interest rate would lead to a lower present value of the repayments.

b. Larger benefit, since a higher interest rate would result in a larger future value.

c. Smaller benefit, since a higher interest rate would lead to a lower present value of the repayments.

d. Smaller benefit, since a higher interest rate would result in larger repayments in the future.