Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. Your firm can purchase a new delivery truck for an upfront cost of $200,000, borrowing the needed funds at 6.16% APR with quarterly compounding. Or your firm can lease a truck from the manufacturer for five years for a monthly lease payment of $4,000 (paid at the end of each month).

If your firm chooses to lease the truck, the effective annual rate you pay is: