Donald is the owner of a small restaurant, and is considering renovating his kitchen and buying new equipment to keep up with increasing business. He has received a quote of $30,000 from the contractor John for this renovation and equipment. After some additional research and negotiation, Donald has noted/secured the following:

• John has agreed to let Donald pay the $30,000 cost of the renovation as 10 equal fortnightly payments (i.e. 10 payments of $3000), the first being made immediately.
• The final repayment will coincide with the completion of the renovation. Donald can reopen his restaurant immediately after this.
• Donald's bank account pays interest at 7% p.a. compounding semi-annually.

For the purposes of this question, assume he can both invest and borrow at this rate.

b) Determine the equivalent effective annual rate for Donald's account. (1 mark)