Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity Interest Expense Increase in Carrying Value Cash Paid Date 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 $12,500 12,500 12,500 12,500 12,500 12,500 $14,262 14,368 14,480 14,599 14,725 14,859 $1,762 1,868 1.980 2,099 2,225 2,359 Carrying Value $ 237,707 239, 469 241,337 243,317 245, 416 247,641 250,000 What is the annual market interest rate on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate. (Do not round your intermediate calculations.)