A firm wants to borrow money by issuing a $10 million floating rate note for 5 years. The note will pay semi-annual coupons at 6-month LIBOR +3.5%. The current 6-month LIBOR rate is 4% per year compounded semi-annually. In addition the firm wants to limit its interest rate risk by buying a 5-yr CAP with semi-annual payments and a strike rate of 5% per year compounded semi-annually and a notional principal of $10 million. The premium for the cap is 3.2% of the notional amount. To reduce the up-front cost of the CAP the firm will sell a FLOOR with semi-annual payments and a strike rate of 3% per year compounded semi-annually and a notional principal of $10 million. The premium for the FLOOR is 2.0% of the notional amount. What is the worst case all-in-cost (i.e. IRR) of this structure? Express your answer as a percentage per year compounded semi-annually.