The effective annual rate on your firm borrowings is closest

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Question: Your ?rm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for ?ve years for a monthly lease payment of $4000 (paid at the end of each month). Your firm can borrow at 0% APR with quarterly compounding. The effective annual rate on your firm's borrowings is closest to:

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