Pet Tech is launching a health monitoring collar for dogs. The company recently raised a $$1$ million convertible promissory note with an annual accrued interest rate of $6\%$ and a $12\%$ discount upon conversion. The company is expected to convert this note into equity in $4$ years.

What will the investor's annual IRR be on the promissory note from time of purchase until conversion? The correct answer is $9\mathrm{.}4,$ please explain fully