Q1. Interest is paid from the loan value. The remaining amount is the proceeds.
... I = Prt = $1000·0.12·(120/360) = $40 . . . . amount of interest
The proceeds are then
... $1000 - 40 = $960
Q2. In the absence of loan fees, the given annual rate is the APR, 18.0%.
The effective rate when 18% is compounded monthly is
... (1 +0.18/12)^12 - 1 ≈ 19.6%
This does not appear to be what the question is asking.
