A local finance company quotes an interest rate of 18.5 percent on one-year loans. So, if you borrow $41,000, the interest for the year will be $7,585. Because you must repay a total of $48,585 in one year, the finance company requires you to pay $48,585/12, or $4,048.75 per month over the next 12 months. Requirement 1: Is the interest rate on this loan 18.5 percent? Requirement 2: What rate would legally have to be quoted? Requirement 3: What is the effective annual rate?