John takes out a loan for L and agrees to pay it back in 20 years using the sinking fund method. Thus, besides paying the outstanding interest on the loan at the end of each year, John will make equal size payments into the fund account at year's end. After the 10th payments (i.e. interest and fund payments) are made, the fund contains enough money to pay-off only 25% of the loan (i.e. 75% of the loan amount remains).
Find the annual effective interest rate gained by the sinking fund.