Please probide steps and explination as to why the anwser is C$!$

U$.$S$.$ Treasury rates are $2\%$ while U$.$K$.$ rates are $4\%.$ The spot rate is $$\frac{1\mathrm{.}25}{}.$

A U$.$S$.$ bank is charging $5\%$ for borrowers.

A U$.$K$.$ bank is charging $6\%$ for borrowers.

What is the effective exchange rate with a money market hedge if you owe $10$ million?

A$.$ $$\frac{1\mathrm{.}2260}{}$

B$.$ $$\frac{1\mathrm{.}2028}{}$

C$.$ $$\frac{1\mathrm{.}2620}{}$

D$.$ $$\frac{1\mathrm{.}2347}{}$