A bank offers your firm a revolving credit arrangement for up to $$58$ million at an interest

rate of $1\mathrm{.}45$ percent per quarter. The bank also requires you to maintain a compensating

balance of $4$ percent against the unused portion of the credit line, to be deposited in a

non$-$interest$-$bearing account. Assume you have a short$-$term investment account at the

bank that pays $\mathrm{.}80$ percent per quarter, and assume that the bank uses compound

interest on its revolving credit loans.

a$.$ What is your effective annual interest rate $($an opportunity cost$)$ on the revolving credit

arrangement if your firm does not use it during the year? $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

b$.$ What is your effective annual interest rate on the lending arrangement if you borrow

$$26$ million immediately and repay it in one year? $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

c$.$ What is your effective annual interest rate if you borrow $$58$ million immediately and

repay it in one year? $($Do not round intermediate calculations and enter your answer

as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$