You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any time. The interest rate is 407

percent per month. In addition, 2 percent of the amount that you borrow must be deposited in a noninterest-bearing account. Assume

that your bank uses compound interest on its line-of-credit loans

a.

What is the effective annual interest rate on this lending arrangement?

Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.1

b. Suppose you need $28 million today and you repay it in eight months. How much interest will you pay?

Note: Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places,

e.g., 1,234,567.89n

You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any time. The interest rate is . 407 percent per month. In addition, 2 percent of the amount that you borrow must be deposited in a noninterest-bearing account. Assume that your bank uses compound interest on its line-of-credit loans. a. What is the effective annual Interest rate on this lending arrangement? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.1 b. Suppose you need $28 million today and you repay it in elght months. How much interest will you pay? Note: Do not round intermediate calculations and enter your answer in dollars, not millons, rounded to 2 decimal places, e.g-1, 1,234,567,89