A company that makes modular bevel gear drives with a tight swing ratio for optimizing fork-lift vehicles was told that the interest rate on a loan would be an effective 3.5% per quarter, compounded monthly. The owner, confused by the terminology, asked you to help. What is the (a) APR, and (b) APY? (c) Explain how the EFFECT and NOMINAL functions can or cannot be used to find the APR and APY.

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