This question illustrates what is known as discount interest. Imagine you are discussing a loan with a somewhat unscrupulous lender. You want to borrow $25,000 for one year. The interest rate is 14.9 percent. You and the lender agree that the interest on the loan will be .149 * $25,000 = $3,725. So the lender deducts this interest amount from the loan up front and gives you $21,275. In this case, we say that the discount is $3,725. 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 14.94 %