Determination of interest rates  LO3 On 1 July 2018, Pretty Ltd leases a machine with a fair value of $109 445 to Woman Ltd for 5 years at an annual rental (payable in advance) of $25 000, and Woman Ltd guarantees in full the estimated residual value of $15 000 on return of the asset. What would be the interest rate implicit in the lease?

(a) 9%

(b) 10%

(c) 12%

(d) 14%