Calculation of the effective annual rate (APR) (LO4) A local finance company is listed a 16% interest rate on one-year loans. If you apply for a loan from $25,000, the one-year interest will be $4,000. Since you must pay a total of $29,000 in a year, the finance company requires you to pay $29,000 dollars/12, or $2,416.67 per month for the next 12 months. It is about of a loan at 16%? What rate should the company legally quote? what is the rate effective annual