Wicker Corporation is determining whether to support $100,000 of its permanent working capital with a bank note or a short-term bond. The firms bank offers a two-year note for which the firm will receive $100,000 and repay $118,810 at the end of two years. The firm has the option to renew the loan at market rates. Alternatively, Wicker can sell 8.5 percent annual coupon bonds with a 2-year maturity and $1,000 par value at a price of $973.97. How many percentage points lower is the interest rate on the less expensive debt instrument?

a. 0.0%

b. 1.2%

c. 1.0%

d. 1.8%

e. 0.6%