For a 1-year strangle on a nondividend-paying stock, you are given:

• The strangle can only be exercised at the end of one year.
• Let S(1) be the stock price at the end of one year. The payoff from the strangle is as follows:
  • If S(1) 60, payoff is 60 S(1)
  • If 60 < S(1) < 70, payoff is 0
  • If S(1) 70, payoff is S(1) 70
• The current price of the stock is 60.
• In one year, the stock will either sell for 75 or 45.
• The continuously compounded risk-free interest rate is 9%.

Calculate the current price of the strangle using the binomial model.