Finance lease of $5000 per year for 5year payment in advance for lease fair value of$20000.
what is the implicit interest rate

First thing you need to know is the formula for interest. It is:

Interest = Principal * Rate * Time

Since you are trying to find out the interest rate the formula can be rewritten as:

Rate = (Principal * Time) / Interest


Your interest is your payments of $5,000 * 5 payments = $25,000 total payments - the principal of $20,000 = $5,000 Interest


Your principal is $20,000 and your time is 5 years.