A local finance company quotes a 18 percent interest rate on one-year loans. So, if you borrow $20,000, the interest for the year will be $3,600. Because you must repay a total of $23,600 in one year, the finance company requires you to pay $23,600/12, or $1,966.67, per month over the next 12 months.

a. What rate would legally have to be quoted?

b.	What is the effective annual rate?