Why does Effect have to be used for the friends interest rate but the loan taken from the bank stays at 18%?

You borrow $3500 for one year from a friend at an interest rate of 1.5% per month instead of taking a loan from a bank at 18% per year. Compare how much money you will save or lose in the transaction. Assume you make one payment at the end of the year either way. 1.5%mothetFronthFriend= Effect (1.5%12,12) =19.56% N=1;=19.56PV=3500PMT=?=4185FV=0P(Y=1C)Y=1N=1i=18%PV=3500PMT=?=4130FV=0P/Y=1C/Y=1 =41854130=55