A house is for sale for $547,000. You have a choice of two 20-year mortgage loans with monthly payments: (1) if you finance 90% of the price, you can obtain a loan with a 4% rate of interest or (2) if you finance 80% of the price, you can obtain a loan with a 3.5% rate of interest. What is the effective annual rate of interest on the incremental amount borrowed on the first loan?

Please input your answer as an annual interest rate (i.e. 8.32% would be input as 8.32).