David Kapamagian borrowed money from a bank to finance a small fishing boat. The bank’s loan terms allowed him to defer payments (interest is still being charged even though payment is deferred) for six months and then to make 36 equal end‐of‐month payments thereafter. The original bank note was for $9,600 with an interest rate of 12% compounded monthly. After 16 monthly payments, David found himself in a financial bind and went to a loan company for assistance in lowering his monthly payments. Fortunately, the loan company offered to pay his debts in one lump sum, provided that he pays the company $208 per month for the next 36 months. What monthly rate of interest is the loan company charging on this transaction?