Sara wishes to purchase a stereo system. She is offered the following payment options:

Option 1:
$ 0 down
$ 435 in 1 year
$ 300 in 2 years

Option 2:
$ 85 down
$ 250 in 1 year
$ 400 in 2 years

Determine the range of interest rates for which the present value of Option 2 is less than the present value of Option 1.