The installments of assessments remaining unpaid bear simple interest at an annual rate equal to:
(1) the sum of:
(a) the average interest rate payable on the outstanding bonds issued to finance the improvement in respect of which the special assessments are levied; plus
(b) additional interest at a rate to be determined by the board of directors, not exceeding 2% a year; or
(2) if bonds are not issued to finance the improvements, at an interest rate to be determined by the board of directors, but not to exceed 10% a year.