Suppose you just won the state lottery, and you have a choice between receiving $2,600,000 today or a 20-year annuity of $200,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.

a.

4.51%

b.

7.24%

c.

8.63%

d.

8.32%

e.

5.93%