Suppose that an investor with a three-year investment horizon is considering purchasing a 10 years 8% coupon bond for $875.38. The yield to maturity for this bond is 10%. The investor does not plan to reinvest the coupon interest payments but at the end of the three years he expects that the then 7years bond will be selling to offer a yield to maturity of 7%. What is the EAR of the investment if the expectations come true?