Your firm's bank has offered you two options for short-term financing in the amount of $400,000. The first option is a committed line of credit with a commitment fee of 0.6% (EAR) and an interest rate of 7% (APR, compounded quarterly). The second option is a loan with a 5% compensating balance and an interest rate of 6.7% (APR, compounded quarterly). If you need $380,000 in financing at the beginning of the year and plan to pay it back at the end of the year, which option has a lower effective annual rate of interest? The EAR of the 7% APR compounded quarterly is %. (Round to three decimal places.)