Suppose You Have a Choice Between Receiving a Lump-Sum Payment

Multiple Choice

Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment today) .Of the following,which is the highest annual interest rate at which you would prefer the four annual payments over the lump-sum payment?

A) 2%
B) ​5%
C) ​7%
D) ​10%