Help Seve & Ex On December 31, 2020, Reagan Inc. signed a lease with Silver Leasing Co. for some equipment having a seven-year useful life. The lease payments are made by Reagan annually, beginning at signing date. Title does not transfer to the lessee, so the equipment will be returned to the lessor on December 31, 2026. There is n purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease. Reagan's lease amortization schedule appears below: Decrease in Outstanding Dec. 31 Payments Interest Balance Balance 2020 $486,776 2020 $90,700 $90,700 396,076 2021 $90,700 $27,725 62,975 333,101 2022 $90,700 23,317 67,383 265,718 2023 $90,700 18,600 72,100 193,619 2024 $90,700 13,553 77,147 116,472 2025 $90,700 8,153 82,547 33,925 2026 $36,300 2,375 33,925 What is the effective annual interest rate charged to Reagan on this lease? Multiple Choice