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An individual approaches the Loan Shark Agency for $1,000 to be repaid in 24 monthly installments. The agency advertises an interest rate of 1.5% per

An individual approaches the Loan Shark Agency for $1,000 to be repaid in 24 monthly installments. The agency advertises an interest rate of 1.5% per month. They proceed to calculate his monthly payment in the following manner.

Amount requested: $1000

Credit investigation: $25

Credit risk insurance: $5

Total : $1,030

a) What is the nominal interest rate?

b) What is the effective interest rate?

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