On September 30, 2017, Ericson Company negotiated a two-year, 1,800,000 dudek loan from a foreign bank at an interest rate of 4 percent per year. It makes interest payments annually on September 30 and will repay the principal on September 30, 2019. Ericson prepares U.S.-dollar financial statements and has a December 31 year-end.

September 30, 2017	$	0.180
December 31, 2017		0.185
September 30, 2018		0.200
December 31, 2018		0.205
September 30, 2019		0.230

Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019.

Effective Cost of Borrowing201720182019

Effective Cost of Borrowing
2017
2018
2019