Chapter 16 - Short-Term Financial Planning In exchange for a $400 million fixed commitment line of credit your firm has agreed to do the following: 1. Pay 17 percent per quarter on any funds actually borrowed. 2. Maintain a 2 percent compensating balance on any funds actually borrowed. y an up-front commitment fee of 21 percent of the amount of the line Skipped Based on this information, answer the following: a. Ignoring the commitment fee, what is the effective annual interest rate on this line of credit? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Suppose your firm immediately uses $219 million of the line and pays it off in one year. What is the effective annual interest rate on this $219 million loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Effective annual rate b. Effective annual rate