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A local finance company quotes an interest rate of 18 percent on one-year loans. So, if you borrow $32,000, the interest for the year will be $5,760. Because you must repay a total of $37,760 in one year, the finance company requires you to pay $37,760/12, or $3,146.67, per month over the next 12 months.
What rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
|b.||What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)|