Refer to the following lease amortization schedule. The five payments are made annually starting with the inception of the lease. A $2,000 bargain purchase option is exercisable at the end of the five-year lease. The asset has an expected economic life of eight years.

What is the effective annual interest rate? see table below

a 9%.

b 10%.

c 11%.

d 20%.

Lease Payment	Cash Payment	Effective Interest	Decrease in Balance	Balance
				34,600
1	8,000	??	??	26,600
2	8,000	2,660	5,340	21,260
3	8,000	2,126	5,874	15,386
4	8,000	1,539	6,461	8,925
5	8,000	??	??	??
6	2,000	182	1,818	0