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 no purchase option, and Reagan guarantees a residual value to the lessor on termination of the lease Reagan's lease amortization schedule appears below: Payments Interest 43 Dec. 31 2020 2020 2021 2022 2023 2024 2025 2026 $85,700 $85,700 $85,700 385,700 $85,700 585,700 $34,300 $31,842 26,994 21,711 15,952 9,674 2,832 Decrease in Outstanding Balance Balance $439,495 $85,700 353,795 53,85B 299,937 58,706 241,231 63,989 177,242 69,748 107,493 76,026 31,463 31,468 What is the effective annual interest rate charged to Reagan on this lease? Multiple Choice 2025 2026 $85,700 $34,300 31,4 9,674 2,832 76,026 31,468 What is the effective annual interest rate charged to Reagan ont Multiple Choice 9%. 3%. 11% 19%