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:

Dec. 31	Payments			Interest			Decrease in Balance			Outstanding Balance
2020										$	375,764
2020	$	74,900					$	74,900			300,864
2021	$	74,900		$	30,086			44,814			256,050
2022	$	74,900			25,605			49,295			206,755
2023	$	74,900			20,676			54,224			152,531
2024	$	74,900			15,253			59,647			92,884
2025	$	74,900			9,288			65,612			27,272
2026	$	30,000			2,727			27,273			0

What is the effective annual interest rate charged to Reagan on this lease?