Problem $3-10$

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John is considering the purchase of a lot. He can buy the lot today and expects the price to rise to $$15,400$ at the end of $10$ years. He believes that he should earn an investment yield of $8$ percent compounded annually on his investment. The asking price for the lot is $$8,000.$

Required:

a$.$ What is the internal rate of return compounded annually on the investment if John purchases the property for $$8,000$ and is able to sell it $10$ years later for $$15,400?$

Note: Do not round intermediate calculations. and round your final answer to $2$ decimal places. b$.$ Should he buy the lot?

a$.$ Internal rate of return b$.$ Should he buy the lot?