These guys need to take some mathematics courses.  Neither method they give in the answer is exact.  If you use an Excel function to compute the rate using the actual cash flows, the true answer is 8.10%.  The complicated formula they give in the Becker text is particularly bizarre.  Mathematically it does not make sense to spread the difference between the par value and net proceeds over the entire term of the bond and compute the rate based on the average of the net proceeds and par value (which is what that formula does).  You pay (or receive) the entire difference between par value and proceeds up front, so why spread it over the term?  The simple formula (8%/(101% - 2%)) given in the answer as an alternate method actually gives a different result (and it is not just rounding as they state).  It also is not entirely correct as it does not consider that the par value has to be repaid at the end (not just the $990 in this case).

The good news is that, with realistic values for the selling price of the bond and the flotation cost, the answers are all close enough so you will probably get the right answer on a multiple choice test.  I would just use the simplest formula (interest % divided by the difference between selling price (in % of par) and flotation cost (in % of par).

Averalis, where did you get the "80" in your calculation of:

80/(.99 * 1000) = 8.08%