Problem $3-10$

John is considering the purchase of a lot. He can buy the lot today and expects the price to rise to $$16,200$ at the end of $10$ years. He believes that he should earn an investment yield of $8$ percent compounded annually on his investment. The asking price for the lot is $$8,000.$

Required:

a$.$ What is the internal rate of return compounded annually on the investment if John purchases the property for $$8,000$ and is able to sell it $10$ years later for $$16,200?$

Note: Do not round your intermediate calculations and round your final answer to $2$ decimal places.

b$.$ Should he buy the lot?