You have secured a $40 million line of credit with a local bank. The terms of the arrangement are 0.5% interest per month and a 10% compensating balance on amounts borrowed (which is kept in a non-interest bearing account). The interest is compounded monthly but is due at the end of the year. If you need to borrow $20 million in useable funds for a year (and do not have any other accounts at the bank), how much interest will you pay and what will be the effective annual rate of interest on your loan