You are considering a safe investment opportunity that requires a

$890

investment today, and will pay

$880

two years from now and another

$890

five years from now.

a. What is the IRR of this investment?

b. If you are choosing between this investment and putting your money in a safe bank account that pays an EAR of

5%

per year for any horizon, can you make the decision by simply comparing this EAR with the IRR of the investment? Explain.

a. What is the IRR of this investment?

The IRR of this investment is

nothing%.

(Round to two decimal places.)