You plan to purchase a car. The dealer is offering special financing at an annual percentage rate (APR) of 8 percent for 100 percent of the car value. The inflation premium is 3.5 percent. If the pure rate in the market is 3 percent, what is the risk premium using the multiplicative form?

A. 4.72%

B. 6.24%

C. 2.69%

D. 1.31%

E. 7.48%