Birthdaybook requires $125,000 to complete a project.

a. With a compensating balance requirement of 10%, how much will the firm need to borrow? (Round the final answer to 2 decimal places.)

Amount to be borrowed $

b. Given your answer to part a and a stated interest rate of 7 percent on the total amount borrowed, what is the annual rate on the $125,000 actually being used? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Annual rate