David can receive one of the following two payment streams:

1. (i) 1000 at time 0, 2000 at time n years, and 3000 at time 2n years

2. (ii) 6000 at time 10 years at an annual effective interest rate I , the present values of the two streams are equal

At an annual effective interest rate of i, the present values of the two streams are equal.

Given vn = 0.76 , calculate i.

1. (A) 3.5%

2. (B) 4.0%

3. (C) 4.5%

4. (D) 5.0%

5. (E) 5.5%