You are considering purchasing a vehicle. You can buy it at the local dealership which will finance the purchase, or you can purchase it on Craigslist, but you have to pay cash for it. The local dealer has offered you the following "special deal."

Face value	20,000
Coupon rate	1.0%
Market rate	???
Term of note	5

You can buy it on Craigslist for the following.

Fair value of the vehicle

16,000

Assuming the note is due at maturity and interest is due annually, what is the actual interest rate the dealership is charging?