The principal $ona$ $$12,000$ loan $istobe$ repaid within one year with level monthly payments, due $at$ the beginning $of$ each month. The twelve

payments equal $$1,000$ each. The entire finance charge $of$ $$929$ plus the first monthly payment are due immediately.

Determine which $of$ the following $is$ closest $to$ the effective annual interest rate $on$ the loan.

Possible Answers

$17\mathrm{.}5\%$

$18\mathrm{.}0\%$

$18\mathrm{.}5\%$

$19\mathrm{.}0\%$

$19\mathrm{.}5\%$