Mr. Thompson borrowed $3,000. He repaid the loan with an interest charge of $500 in 36 monthly payments. What approximate annual percentage rate did he pay? Find the answer to the nearest tenth of a percent. Use the formula r = 2ml/B(n+1) where r = the annual percentage rate, m = the number of payment periods per year, i = the amount of interest, B = the amount of the loan, and n = the number of payments.
a) 18.7%
b) 20.2%
c) 22.5%
d) 25.8%