1. Your friend has offered to lend you money on the following terms: for each $500 that you borrow, you will have to pay $25 in interest for every 30 day period until you have repaid the full amount borrowed. So, for instance, if you borrow $1000 and pay it back in 90 days, you will have also had to pay $25*2*3 = $150 in interest. Suppose you accept these terms and borrow $2000 from him. It takes you a full year to pay him back in full.

a. How much interest did you have to pay him?

b. What was the (annual) interest rate you ultimately had to pay?