3. Assume a bank has estimated that the loss given default (LGD) on mortgage loans to be 20% of the outstanding loan value and the probability of default on such loans derived from internal and external sources is 5%. If risk-free rate in the country (R) is 3%, and the risk premium (RP) that the bank demands on such loans to cover the risk of default is 2%, what would be the expected interest rate (r) that the bank should charge on the mortgage loan?