Suppose most investors expect the inflation rate to be 5% next year, 6% the following year, and 7% thereafter. The real risk-free rate is 3.5%. The maturity risk premium is zero for bonds that mature in 1 year or less, 0.3% for 2-year bonds, and then the MRP increases by 0.3% per year thereafter for 20 years, after which it is stable. What is the interest rate 18-year Treasury bonds?

a. 12.57%

b. 15.43%

c. 8.50%

d. 5.00%