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ABC Company acquired a loan from New Kensington Bank in the amount of $120,000 with a 8% interest rate. The loan will be repaid in

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ABC Company acquired a loan from New Kensington Bank in the amount of $120,000 with a 8% interest rate. The loan will be repaid in exactly one year. Astipulation of the loan requires ABC Company to keep a compensating balance of $25,000 in a New Kensington Bank checking account. What is the effective interest rate that ABC Company will pay? Please round to the second decimal place. 10.11% 9.67% 8.00% 6.62%

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