Memphis Metro, a service$-$based firm that provides high$-$performance training for competitive junior volleyball players, has a credit line with the following specifications:

Average daily borrowings of $$400,000$ on a $$500,000$ committed credit line

Annual interest expense on the credit line of $$14,500$

Commitment fee of $$500$

Calculate the effective cost of the credit line with a compensating balance requirement of $5$ percent.