A local finance company quotes an interest rate of 16.2 percent on one-year loans. So, if you borrow $33,000, the interest for the year will be $5,346. Because you must repay a total of $38,346 in one year, the finance company requires you to pay $38,346/12, or $3,195.50 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.)
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.)