Question: Pete Sampras borrows $10,000 to purchase a car. He must repay the loan in 48 equal end-of-period monthly payments. Interest is calculated at 1.25% per

Pete Sampras borrows $10,000 to purchase a car. He must repay the loan in 48 equal end-of-period monthly payments. Interest is calculated at 1.25% per month. Determine the following:

(a) The nominal annual interest rate

(b) The effective annual interest rate.

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