Consider an American put option. Suppose its stock price is $50 and its strike price is $52. If the risk-free rate is 7% per annum with continuous compounding, the volatility is 32%, and the life of the option is 2 years and there are two time steps, what is the value of this American put option?

$6.50

$2.50

$7.50

$5.50

$8.50