Suppose the current yield on a one-year, zero-coupon bond is 3%, while the yield on a five-year, zero-coupon bond is 4% . Neither bond has any risk of default. Suppose you plan to invest for one year. You will earn more over the year by investing in the five-year bond as long as its yield does not rise above what level? (Assume face value bond.) Hint: It is best not to round intermediate calculations make sure to carry at least four decimal places in intermediate calculations.

Note:

Assume annual compounding.