You volunteer to participate in a game in which you are told that you and another participant, whom you will never meet but is playing nearby, must each make a decision: either you cooperate and benefit both of you, or you defect and benefit only yourself. depending on what you and the other person choose, you stand to receive a certain amount of money. you are participating in the game.

Carey company is borrowing $225,000 for one year at 9.5 percent from second intrastate bank. the bank requires a 15 percent compensating balance. the principal refers to funds the firm can effectively utilize (amount borrowed − compensating balance). a. what is the effective rate of interest? (use a 360-day year. input your answer as a percent rounded to 2 decimal places.) b. what would the effective rate be if carey were required to make 12 equal monthly payments to retire the loan?