You are looking at a one$-$year loan of $$10,000.$ The interest rate is quoted as $12$ percent plus $3$ points. A point on a loan is simply $1$ percent $($one percentage point$)$ of the loan amount. Quotes similar to this one are common with home mortgages. The interest rate quotation in this example requires the borrower to pay $3$ points to the lender up front and repay the loan later with $12$ percent interest.

What rate would you actually be paying here?

Multiple Choice

$17\mathrm{.}01\%$

$15\mathrm{.}46\%$

$8\mathrm{.}64\%$

$13\mathrm{.}92\%$

$12\mathrm{.}00\%$