Your uncle, Jerry, has just won a lottery prize. He has been given two options: (1) a lump sum payment of $350,000 now, or (2) $3,000 at the end of each month for the next 15 years. Assume your uncle is able to receive a 5.00 percent annual return compounded monthly for both options.
What should an annual interest rate be for your uncle to be indifferent towards the two options? Assume the two options start at the same time.