Megan Green is interested in taking out a personal loan for $1,550. However, last year an identity theft scam left her with poor credit. Since then she has learned about the perils of identity theft from personal experience as well as from a variety of sources, including the August 18, 2009, article “Avoiding the Identity Theft Underworld� on a website. Because of the resulting poor credit score due to the identity theft and the fact that she is providing no collateral, the bank is going to charge her a fee of 3.0% of her loan amount as well as take out the interest upfront. The bank is offering her 16% APR for six months.
Calculate the effective interest rate. (Use 360 days a year. Do not round intermediate calculations and round your final answer to the nearest whole number. Omit the "%" sign in your response.)
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