Suppose the current yield on a one-year zero-coupon bond is

4%,

while the yield on a five-year zero-coupon bond is

5%.

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

$1

face value bond.)Hint: It is best not to round intermediate

calculationsmake

sure to carry at least four decimal places in intermediate calculations.

Note:

Assume annual compounding.