QUESTION 17 A bank has 400 identical customers who would like to borrow an amount of $1200 to be repaid with a single payment of principal and interest at the end of four years. Assuming that all customers will repay their loan on time (no default), the bank will charge an annual effective rate of 6.0%. If 18 customers will default on their loan, what annual rate of interest (including default risk) should the bank charge to get their desired rate of return? 6.78% 8.38% 9.11% 8.09% 7.23%