Premier Construction Limited is a company with a $31$ December year$-$end and is

involved in the construction industry.

The company has the following lease agreements on its books:

Lease agreement $1$: Construction truck

Premier Construction Limited acquired a new construction truck in terms of a lease

agreement with the following terms:

$$ Commencement date $1$ January $2023$

$$ Sales price $$ R$1020500,$ which is the same as the fair value of the

construction truck.

$$ Lease period $5$ years

$$ Payments of R$168000$ are payable half$-$yearly in arrears, on $30$ June and $31$

December.

$$ There are no guaranteed or unguaranteed residual values.

$$ Ownership passes to Premier Construction Limited at the end of the lease

agreement.

The construction truck was available for use and put into use on $1$ January $2023.$

Depreciation is written off at $20\%$ per annum on cost$.$

REQUIRED:

$1\mathrm{.}1)$ With reference to Lease agreement $1,$ calculate the interest rate implicit to the

lease. Please show all workings$/$inputs into the calculator to receive full marks.

Round your answer to $3$ decimals.