Youve just won the Im Feelin Lucky Sweepstakes!! They offer two payout choices:

1) $500,000 now OR

2) $50,000 at the end of every year for 20 years

What interest rate have the sponsors assumed in structuring these alternatives?

Select one:

a.

7.75%

b.

8.92%

c.

7.20%

d.

8.19%