In exchange for a $400 million fixed commitment line of credit, your firm has agreed to do the following: 1. Pay 1.96 percent per quarter on any funds actually borrowed. 2. Maintain a 5 percent compensating balance on any funds actually borrowed. 3. Pay an up-front commitment fee of 0.24 percent of the amount of the line.
Required: Based on this information, answer the following:
Suppose your firm immediately uses $226 million of the line and pays it off in one year. What is the effective annual interest rate on this $226 million loan? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)