A $1,000 par value bond with 12 years to maturity pays a coupon rate of 5.5%, annually. The bond’s yield to maturity is 5.9% per year. You expect the bond’s yield to maturity in three years will be 5.1% per year and you can reinvest the bond’s coupon payments over the next three years in short-term securities that pay 3.5% per year. What is the expected annual return over the next three years?