Connie had a tough month. She had to replace her fridge for $1,300 and needed new winter tires for $800. She also wanted a new mountain bike so she splurged and bought one for $2,500. She put all of these on her credit card as she did not have the cash on hand. Her credit card carries interest at 18% annually but it is compounded monthly (1.5% per month). Required:

a) What is the effective interest rate on the credit card?

b) How much interest will Connie pay over the first year of the balance assuming she makes no payments.

c) If Connie makes the minimum monthly payments of 4% ($184), how long will it take to pay off the debt and how much interest will be paid over the life of the loan.