Your question has a few semantic problems.
Your use of the word simple interest implies that the bank is not paying interest on the interest you receive once a quarter. If that's true the answer's different from the below. But I don't know of any bank that does that, so I'm going to assume you didn't mean to use "simple" as a technical term. If you did, you would need to say at what point does the bank start paying interest on interest? Once a year? Never? Banks don't work that way.
The word annualized means taken to the frequency of one year. An annualized yield is always the yield over the course of a single year. Given a certain total yield over ten years, for example (the "10-year yield"), the annualized yield is the yield that, if you got it each year for 10 years would give you the 10-year yield you have observed. Let R be the 10-year yield. Then the annualized yield is
(1 + R)^(1/10) - 1.
You have therefore already calculated the annualized yield for your case. It is
(1 + .018125) ^ 4 - 1 = 0.074495. As written, this is the solution to your question.
You can get the two-year yield, which is
(1 + 0.074495)^2 - 1, but this number cannot accurately be called annualized.
====== Update after question clarification =======
The annualized return in your scenario is the same whether you use a 1, 2, or 3 year term.