Consider a call option for an asset with the following parameters

Current spot price is $50

Option expires in 12 months

Each month the asset could increase in value by 3% or decrease in value by inverse

The risk free rate is 25 basis points per month

S0 = $50, T=12, U=1.03, D=1/1.03, R=1.0025

Use the distribution to calculate the premium of a call with strike $55 (10% otm) expiring in 12 months