Consider a $100,000 bank loan for one year at a quoted annual simple interest rate of 9%. What is the difference between the cost of this bank loan when it is quoted with a compensating balance of 15%, versus the cost of this bank loan when it is borrowed on a discount basis?

A) The compensating loan is 0.60% per year cheaper

B) The compensating loan is 0.70% per year cheaper

C) The discount loan is 0.60% per year cheaper

D) The discount loan is 0.70% per year cheaper

E) Both loans are charging the same effective annual interest rate