X2 issued callable bonds on January 1, 2018. The bonds pay interest annually on December 31 each year. X2's accountant has projected the following amortization schedule from issuance until maturity:

Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value

1/1/2018$104,212

12/31/2018 $7,000$6,253$747103,465

12/31/2019 7,0006,208792102,673

12/31/2020 7,0006,160840101,833

12/31/2021 7,0006,110890100,943

12/31/2022 7,0006,057943100,000

What is the annual stated interest rate on the bonds?

Select one or more:

a. 6%.

b. 7%

c. 3%.

d. 3.5%.