The Bank of Loans uses the following rating scheme to classify the riskiness of its customers.

Risk ClassRisk Premium (%)Prime.05High grade1.0Upper medium grade1.5Lower medium grade2.0Speculative: Non-investment grade4.0Speculative: Highly6.0Substantial risks9.0Extremely speculative12.0

The bank's pure rate of interest is 3.5% and the inflation premium is 3%.

What rate would the bank offer a customer who is in the upper medium grade risk class?

A.6.11%

B.7.16%

C.7.68%

D.8.20%

E.6.64%

F.8.73%