With interest rates on the rise, many Americans are wondering what their investment strategy should be. A safe (i.e., a virtually risk-free) and increasingly popular ways to keep pace with the cost of living is to purchase inflation-indexed government bonds, These so called I-bonds pay competitive interest and increase in value when the CPI rises, These bonds can be held for up to 30 years. Suppose you purchased an I-bond for $10,000 and held it for 11 years, at which time you received $20,000 for the bond. Inflation has averaged 3% per year during this period. There are 2 questions in total. 1. What is the annual return (IRR in actual dollars)? 0 7.5% 4.5% 0 5.5% 0 6.5% 0 3.5%