A firm has a $500,000 line of credit with a 3.1% compensating balance requirement. The quoted rate on the line is prime +3.5%, and the prime rate is currently 2.1%. What is the effective annual rate (EAR)?

Note: You don't need to know how much the firm borrows, the EAR will be the same for all borrowings $200,000 or less. However for convenience in calculations, you may assume that the firm borrows $100,000.

Express your answer as a percentage, for example 3.18% should be entered as 3.18 without the percentage sign.