Suppose that a bank does the following:

Sets a loan rate on a prospective loan at 8 percent (where BR = 5% and = 3%).

Charges a 1 /10 percent (or 0.10 percent) loan origination fee to the borrower.

Imposes a 5% compensating balance requirement as noninterest-bearing demand deposits.

Pays reserve requirements of 10 percent imposed by the Fed on the banks demand deposits.

Calculate the banks return on this loan.