Michaels Computers local bank offers the firm a 12-month revolving credit agreement (revolver) of $500,000. The revolvers APR is 12 percent with a commitment fee of 0.5 percent on the unused portion. Over the course of a year, Michaels chief financial officer (CFO) believes it will have an average balance of $280,000 on the revolver, with a low of $50,000 and high of $450,000. What is the annual effective cost of this proposed agreement?