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

Risk Class Risk Premium (%)

Prime .05

High grade 1.0

Upper medium grade 1.5

Lower medium grade 2.0

Speculative: Non-investment grade 4.0

Speculative: Highly 6.0

Substantial risks 9.0

Extremely speculative 12.0

The bank's pure rate of interest is 3.0% and the inflation premium is 3%.

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

A.8.21%

B.6.64%

C.9.26%

D.7.16%

E.10.31%

F.7.69%

G.8.74%

H.9.79%