To find the annual interest rate $r$, we use the following information:

• The bond has a duration of 3 years.
• The total interest paid over 3 years is $3,600.
• The bond costs $20,000.

The total interest formula for a bond is given by:

$\text{Total Interest} = P \times r \times t$

Where:

• $P$ is the principal amount ($20,000),
• $r$ is the annual interest rate (which we need to find),
• $t$ is the time in years (3 years).

We know the total interest over 3 years is $3,600, so we can plug the known values into the equation:

$3600 = 20000 \times r \times 3$

Simplify the equation:

$3600 = 60000r$

Now, solve for $r$:

$r = \frac{3600}{60000} = 0.06$

Thus, the annual interest rate $r$ is:

$r = 0.06 \times 100 = 6\%$

Therefore, the annual interest rate is 6.000%.

Would you like more details or have any questions?

Here are five related questions to explore:

1. How do you calculate interest for bonds with different durations?
2. How does compound interest differ from simple interest in bond calculations?
3. How does the bond market affect interest rates?
4. What is the formula for compound interest?
5. How does bond price relate to interest rate fluctuations?

Tip: Always verify if the interest given is simple or compound, as this impacts the overall calculations!