Del Hawley, owner of Hawley's Hardware, is negotiating with First City Bank for a 1-year loan of $50,000. First City has offered Hawley the following alternatives. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12 percent annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year. b. A 9 percent annual rate on a simple interest loan, with a 20 percent compensating balance required and interest due at the end of the year. c. An 8.75 percent annual rate on a discounted loan, with a 15 percent compensating balance. d. Interest is figured as 8 percent of the $50,000 amount, payable at the end of the year, but the $50,000 is repayable in monthly installments during the year.