Lucy Love, owner of Loves Laundry, is negotiating with Arizona Credit Union (ACU) for a 1-year loan of $30,000. ACU has offered Love the alternatives listed below. Calculate the effective annual interest rate for each alternative. You must show calculations to receive full credit. (3.5pts)

• A 4.00% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year.

• A 6.00% annual rate on a simple interest loan, with a 15% compensating balance required and interest due at the end of the year.

• An 7.50% annual rate on a discounted loan, with a 10% compensating balance.