Zeigler Marina Has a Line of Credit with a Local

Zeigler 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 0.57 percent per month. The bank charges compound interest and also requires that 5 percent of the amount borrowed be deposited into a noninterest-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) 7.80 percent
E) 7.91 percent