Cost of Bank Loans. Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of $50,000. First City has offered Hawley the alternatives listed below. Calculate the effective annual interest rate for each alternative. You must show calculations to receive full credit. (6pts)

A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year.

A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year.

An 8.75% annual rate on a discounted loan, with a 15% compensating balance.