On March 3, XYZ Company borrows $10,000,000 for one year with interest paid quarterly at LIBOR and also has a long position in an interest rate cap with an exercise rate of 9% for a premium of $50,000 in order to protect against rising interest rates. Given the following term structure, determine the effective cost of borrowing with and without the cap.

Date	Days in Period	LIBOR (%)
March 3		9
June 3	91	8
September 3	92	11
December 3	92	12
March 3	90	13