A bank has a listed prime rate of $7$ percent. They have estimated that the marginal cost of raising funds is $5$ percent, their default risk premium on a loan is $1\mathrm{.}5$ percent and that they want a profit margin of $2$ percent. They have also estimated that the term risk premium is $0\mathrm{.}5$ percent. What is the interest rate this bank will charge if they use the price leadership model $($and the prime rate is their base rate$)?$