1. When Rutherford Steels bid for an infrastructure project, the company was offered the following two payment options:

Option A: A payment of $750,000 at the end of one year, which is the scheduled completion time for the project.

Option B:$100,000 advance payment on commencement of the project and the balance payment in two years.

If the two payments are economically equivalent and the interest rate is 3% compounded semi-annually, calculate the balance payment from Option B