General Investment Co. (GIC) purchased bonds on January 1, 2015. GIC's accountant has projected the following amortization schedule from purchase until maturity:

Date	Cash Paid	Interest Revenue	Increase in Carrying Value	Carrying Value
1/1/15				$107,069
6/30/15	$3,300	$3,747	$447	107,516
12/31/15	3,300	3,763	463	107,979
6/30/16	3,300	3,779	479	108,458
12/31/16	3,300	3,796	496	108,954
6/30/17	3,300	3,813	513	109,467
12/31/17	3,300	3,833	533	$110,000

What is the annual market interest rate on the bonds?

3.5%

3.0%

7.0%

6.0%