A lender makes a loan of S3 million that carries an interest rate of six-month LIBOR + 125 basis points and matures in two years. The lender is worried about a decline in the LIBOR rate and in order to hedge against this risk decides to purchase a 5 percent floor on six-month LIBOR over the next two years. The annual floor premium is 0.75 percent (paid semiannually). Indicate the annualized lending rates if LIBOR rates are above and below 5 percent.