You are considering investing in the following bond:

• Current Price: $875
• Coupon Rate: 4% (Coupons are paid annually.)
• Maturity: 15 years
• Par Value: $1,000

Your investment horizon is 5 years; that is, you plan to sell the bond 5 years later and you expect to reinvest the coupons received at 3.5% annually. You also expect the bond to be priced to yield 5% in 5 years. Calculate your expected annualized rate of return over the 5-year investment horizon. Please write your answer using at least 4 decimal places.