Use the information below for the next two problems. Schlitz Inc. has obtained a 90-day bank loan of $10,000 with an annual interest rate of 15%, payable at maturity. Assume a 365-day year.

a. How much dollar interest will the firm pay on the 90-day loan?

b. Find the 90-day interest rate on the loan.

c. Annualize your result in part b (above) to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances.