Mr Rick Martinio Is Seeking to Invest $50,000 Today Over

Mr Rick Martinio is seeking to invest $50,000 today over a 5-year period to obtain the maximum possible fixed interest return. All interest accrued from each fixed interest investment will be payable upon maturity of the investment. The Wacpac Bank has offered Rick an interest rate of 5% p.a. compounded on a 6-monthly basis over a 3-year period. This bank charges an exit fee of $300 on the maturity of any fixed interest investment. At the end of year 3 Rick expects to be able to reinvest the accumulated proceeds into a 2-year fixed interest investment with Wacpac at an annual interest rate of 7% p.a. Rick has also been provided a quote from the National Provincial Bank which provides for a 4-year fixed interest investment at a rate of 6% p.a. and charges a one-off fee of $600 for any fixed interest investments undertaken by an entity within a 5-year period. Both banks offer fixed interest investments having terms of 1 to 4 years.
What interest rate would Rick need to earn in year 5 with the National Provincial Bank in order to be competitive with the fixed interest investment offerings of the Wacpac Bank? Hint: Use a financial calculator to assist if seeking to calculate an Internal Rate of Return (IRR).