A local finance company quotes a 16 percent interest rate on one-year loans. So, if you borrow $24,000, the interest for the year will be $3,840. Because you must repay a total of $27,840 in one year, the finance company requires you to pay $27,840 divided by 12, or $2,320.00, per month over the next 12 months. Is this a 16 percent loan?