Charlene can invest $4,000 of after-tax dollars (AT$) directly in a taxable bond outside an IRA, or she can contribute the $4,000 to a nondeductible IRA and invest in the same bond through the IRA vehicle. In either case the bond yields an annual 7% before-tax rate of return (BTROR). Charlene's marginal tax rate is 20%, and she expects it to remain so for the entire investment horizon of 25 years. What is her annualized after-tax rate of return (annualized ATROR) for the "bond outside the IRA"?

Group of answer choices

6%

7%

6.5%

5.6%