On January 1, 2021, Splash City issues $450,000 of 9% bonds, due in 10 years, with interest payable quarterly each year. Portions of the bond amortization schedule appear below:

Date	Cash paid for interest	Interest expense	Increase in carrying value	Carrying value
1/1/2021				$371,988
3/31/2021	$10,125	$11,160	$1,035	$373,023
6/30/2021	$10,125	$11,191	$1,066	$374,089
*	*	*	*	*
*	*	*	*	*

What is the market annual interest rate?

Multiple Choice

• 10%

• 12%

• 9%

• 6%