An investor is considering the purchase of a medium-quality, two-year, zero coupon corporate bond. She uses time value equations Opportunity Investment Model to analyze potential purchases. She measures project-specific-risk in future cash flows, and she believes that the project-risk-adjusted CF₂ for a prospective bond is 96. The promised CF₂ for this bond is $100. The annualized risk-free rate (rrf) for two-year bonds is 2%.

If she thinks she should pay just 76 for the bond today, what annual discount rate (r) did she use to get this value?

Round your answer to three decimal places and do not represent your answer as a percent. IE: write 0.067 not 6.7%.