This question illustrates what is known as discount interest. Imagine you are discussing loan with a somewhat unscrupulous lender. You want to borrow $16,000 for one year. The interest rate is 12.1 percent. You and the lender agree that the interest on the loan will be .121 * $16,000 = $1,936. So the lender deducts this interest amount from the loan up front and gives you $14,064. In this case, we say that the discount is $1,936. What is the effective interest rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective interest rate %