Company CCC is facing year after year losses.

Its bank has categorized CCC as Risk 3.

From the past, the bank knows that companies that are in this category have a repayment record of:

• In 2% of the cases the company will fail to do any payment
• In 5% of the cases the company will pay only 50% of the amount due
• In 5% of the cases the company will pay only 75% of the amount due
• In 10% of the cases the company will pay the principal, but not the interest
• In the remaining 78% of the cases, the company will pay according to the contract

The risk-free interest rate is 7%.

The term of the loan is 1 year, simple interest.

What rate will be charged to CCC?