Discount-Mart issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.

Pmt Cash Eff.Int Decr.Bal Out.Bal

8,640,967

1 300k 345,639 45,639 8,686,606

2 300k 347,464 47,464 8,734,070

3 300k 349,363 49,363 8,783,433

4 300k


What is the effective annual rate of interest on the bonds?