Cost of Trade Credit and Bank Loan Lamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 60; and it currently pays after 5 days and takes discounts. Lamar plans to expand, which will require additional financing. Assume there are 365 days in a year for your calculations.

If the company could get the funds from a bank at a rate of 7%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan? (Round your answer to two decimal places.)

a. ________ %