Raymond's Leasing Company Signed an Agreement to Lease an Asset

Multiple Choice

Raymond's Leasing Company signed an agreement to lease an asset that has a fair value of $800,000 on December 31, 2014. The lease will be paid in seven equal annual payments of $138,730, beginning on December 31, 2014. The interest rate included in the lease agreement is most nearly equal to

A) 8%.
B) 7%.
C) 6%.
D) 5%.