Suppose your firm is seeking an eight-year, amortizing $860,000 loan with annual payments, and your bank is offering you the cholce between a loan of $916,000 with a compensating balance of $56,000 and a loan of $860,000 without a compensating balance. The interest rate on the $860,000 loan is 8.5 percent. How low would the interest rate on the loan with the compensating balance have to be for you to choose it? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)