Tony Hawks Adventure (THA) issued callable bonds on January 1, 2015. THAs accountant has projected the following amortization schedule from issuance until maturity:

Date	Cash Paid	Interest Expense	Increase in Carrying Value	Carrying Value
1/1/2015				$194,758
6/30/2015	$7,000	$7,790	$790	$195,548
12/31/2015	$7,000	$7,822	$822	$196,370
6/30/2016	$7,000	$7,855	$855	$197,225
12/31/2016	$7,000	$7,889	$889	$198,114
6/30/2017	$7,000	$7,925	$925	$199,039
12/31/2017	$7,000	$7,961	$961	$200,000

What is the annual market interest rate on the bonds? (Hint: Be sure to provide the annual rate rather than the six month rate.)

Question 33 options:

	4%
	8%
	7%
	3.5%