X2 issued callable bonds on January 1, 2024. The bonds pay interest annually on December 31 each year. X2's accountant has projected the following amortization schedule from issuance until maturity: Date 01/01/2024 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 Cash Paid $8,320 8,320 8,320 8,320 8,320 Interest Expense $7,578 7,527 7,471 7,412 7,348 What is the annual market interest rate on the bonds? Decrease in Carrying Value $742 793 849 908 972 Carrying Value $108,264 107,522 106,729 105,880 104,972 104,000

answer choices:

3.5%

7%

4%

8%

X2 issued callable bonds on January 1,2024. The bonds pay interest annually on December 31 each year \\( X 2 \\) 's accountant has projected the following amortization schedule from issuance unth maturity: What is the annual market interest rate on the bonds