Simple Simon's Bakery purchases supplies on terms of 1.4/10, net 26. If Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon's owner an interest rate of 10.7% on borrowed funds.

Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Use 365 days for a year.

Simple Simon's can earn an effective rate of ???%. (Round to one decimal place.)