A local finance company quotes an interest rate of 16.6 percent on one-year loans. So, if you borrow $23,000, the interest for the year will be $3,818. Because you must repay a total of $26,818 in one year, the finance company requires you to pay $26,818/12, or $2,234.83, per month over the next 12 months. Is the interest rate on the loan 16.6 percent? What rate would legally have to be quoted? What is the effective annual rate?