$5$

Your company has arranged a revolving credit agreement for up to $$74$ million at an interest rate of $1\mathrm{.}43$ percent per quarter. The agreement also requ your company to maintain a compensating balance of $4$ percent of the unused portion of the credit line, to be deposited in a noninterest$-$bearing acc Your company's short$-$term investment account at the same bank pays an interest rate of $\mathrm{.}57$ per quarter. What is the effective annual interest rate if $y$ company borrows $$39$ million for one year?

Multiple Choice

$6\mathrm{.}52\%$

$5\mathrm{.}84\%$

$6\mathrm{.}38\%$

$7\mathrm{.}45\%$

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