The York Company has arranged a line of credit that allows it to borrow up to $58 milion at any time. The interest rate is .634 percent per month. Additionally, the company must deposit 4 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. What is the effective annual rate on this line of credit?

Multiple Choice

• 9.12%

• 7.24%

• 6.60%

• 8.21%

• 7.88%