Question
Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease A $2,600 purchase option
Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease A $2,600 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Payment Payment Effective Interest Decrease in Outstanding Balance Balance 39,560 1 9,100 ?? ?? 30,460 2 9,100 3,046 6,054 24,406 3 9,100 2,441 6,659 17,747 4 9,100 1,775 7,325 10,422 5 56 9,100 ?? ?? ?? 2,600 236 2,364 0 What is the effective annual interest rate? (Round your answer to the nearest whole percent.)
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