Megan Green is interested in taking out a personal loan for $1,650. However, last year an identity theft scam left her with poor credit. Since then she has learned about the perils of identity theft from personal experience as well as from a variety of sources, including the August 18, 2009, article "Avoiding the Identity Theft Underworld" on www.forbes.com. Because of the resulting poor credit score due to the identity theft and the fact that she is providing no collateral, the bank is going to charge her a fee of 2.0% of her loan amount as well as take out the interest upfront. The bank is offering her 16% APR for six months.
Calculate the effective interest rate.