Multiple choice

A. 9%

B. 8%

C. 13%

D. 11%

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable Cash Effective Interest Outstanding Balance 84,982 71,982 66,900 61,259 54,997 48,047 40,332 31,768 22,263 Decrease in balance Payment Payment 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 5,082 5,641 6,262 6,950 7,715 8,564 9,505 7,918 7,359 6,738 6,050 5,285 4,436 3,495 3 10 What is the effective annual interest rate? (Round final answer to the nearest whole percentage.)