First National Bank is planning to raise $30 million through an offering of negotiable CDs. The current rate for similar CDs is 5.5 percent. Noninterest cost rate for CDs is 0.25 percent. First National pays a deposit insurance premium of 0.0023 per dollar of insured deposits. Due to other immediate cash needs, only $25 million will be fully invested. What is the effective cost rate of borrowing in the CD market for the bank?

a. 5.5%

b. 6.9%

c. 3.8%

d. 6.0%

e. 7.2%

E. is the right answer but can you please show the working for this problem. Thank you.