Colleen and Bill have just purchased a house for $650,000, with the seller holding a second mortgage of $100,000.They promise to pay the seller $100,000 plus all accrued interest 5 years from now. The seller offers them three interest options on the second mortgage:

(a) Simple interest at 12% per annum

(b) 11½% interest compounded monthly

(c) 11¼% interest compounded continuously

Which option is best; that is, which results in the least interest on the loan?