(i) Describe and interpret the assumptions related to the problem.

(ii) Apply the appropriate mathematical model to solve the problem.

(iii) Calculate the correct solution to the problem.

Lastimar Inc. $1,000 par value corporate bonds were issued four years ago and have 16 years left to maturity. The bonds offer a 5% coupon rate paid semiannually and are currently selling in the market for $875. What is the bonds annual yield to maturity? Submit your answer as a percentage and round to two decimal places.