Equivalent Annual Cost [LO4] Light emitting diodes (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $0.50 and lasts for 800 hours, while an equivalent LED light bulb costs $10 and lasts for 10,000 hours. Assuming an interest rate of 5% per year, what is the equivalent annual cost of using each type of bulb?
a) Incandescent: $6.25, LED: $1.50
b) Incandescent: $6.50, LED: $2.00
c) Incandescent: $6.75, LED: $2.50
d) Incandescent: $7.00, LED: $3.00