Decatur Marina Has a Line of Credit with a Local

Decatur Marina has a line of credit with a local bank that permits it to borrow up to $1.3 million at any time.The interest rate is 0.60 percent per month.The bank charges compound interest and also requires that 5 percent of the amount borrowed be deposited into a non-interest-bearing account.What is the effective annual interest rate on this loan?

A) 6.68 percent
B) 7.43 percent
C) 7.74 percent
D) 7.83 percent
E) 8.91 percent