A local finance company quotes an interest rate of 16.5 percent on one-year loans. So, if you borrow $25,000, the interest for the year will be $4,125. Because you must repay a total of $29,125 in one year, the finance company requires you to pay $29,125/12, or $2,427.08, per month over the next 12 months. Is the interest rate on this loan 16.5 percent? What rate would legally have to be quoted? What is the effective annual rate?