A young engineering company is a subcontractor in an effort to develop technology that will reliably detect and respond to release of a

nuclear weapon. The company is in need of additional funding and issues a series of $$1,000$ face value bonds that pay a nominal annual

rate of $5\%$ with quarterly payments. The bond matures in $5$ years.

Part a

If you buy one bond for $$850$ and keep it until maturity, what is your effective annual rate of return?

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$\%$

Carry all interim calculations to $5$ decimal places and then round your final answer to $2$ decimal places. The tolerance is $+-0\mathrm{.}02.$