A local finance company quotes an interest rate of $18\mathrm{.}4$ percent on one$-$year loans. So$,$ if you borrow

$$20,000,$ the interest for the year will be $$3,680.$ Because you must repay a total of $$23,680$ in one year,

the finance company requires you to pay $$23,680/12,$ or $$1,973\mathrm{.}33,$ per month over the next $12$ months. Is

the interest rate on this loan $18\mathrm{.}4$ percent? What rate would legally have to be quoted? What is the

effective annual rate?