Kern Corporation's $5-$year bonds yield $8\mathrm{.}70\%$ and $5-$year T$-$bonds yield $5\mathrm{.}80\%.$ The real risk$-$free rate is r$*=3\mathrm{.}30\%,$ the default risk premium for Kern's bonds is DRP $=1\mathrm{.}60\%$ versus zero for T$-$bonds, the liquidity premium on Kern's bonds is LP $=1\mathrm{.}30\%,$ and the maturity risk premium for all bonds is found with the formula MRP $=($t $-1)\backslash$times $0\mathrm{.}1\%,$ where t $=$ number of years to maturity. What is the inflation premium $($IP$)$ on all $5-$year bonds?

a$.2\mathrm{.}10\%$

b$.3\mathrm{.}80\%$

c$.2\mathrm{.}03\%$

d$.1\mathrm{.}60\%$