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Accounting Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2500 purchase option
Accounting
Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2500 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Payment Payment 1 9600 2 9600 Effective Decrease in Outstanding Interest Balance Balance 43,900 ?? ?? 34,300 2401 7199 27,101 1897 7703 19,398 1358 8242 11,156 ?? ?? ?? 164 2336 0 3 4 9600 9600 9600 5 6 2500 What is the effective annual interest rate? (Round your answer to the nearest whole percent.) OA) 7%. B) 10%. OC) 5%. OD) 15%Step by Step Solution
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