Juno Industrial Supply Has a $150,000 Line of Credit with a 7.5

Juno Industrial Supply has a $150,000 line of credit with a 7.5 percent interest rate.The loan agreement requires a 2 percent compensating balance,which is based on the total amount borrowed,and which will be held in an interest-free account.What is the effective interest rate if the firm borrows $90,000 on the line of credit for one year?

A) 5.42 percent
B) 5.50 percent
C) 7.30 percent
D) 7.50 percent
E) 7.65 percent