Dr. Ruth is going to borrow $5,000 to help write a book. The loan is for one year and the money can be borrowed stolther the prime rate or the LIBOR rate. Assume the prime rate is 6 percent and LIBOR 1.5 percent less. Also assume there will be a $40 transaction fee with LIBOR (this amount must be added to the Interest cost with LIBOR). a. What is the effective Interest rate on the LIBOR loan? (Use a 360-day year. Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Effective interont rate 22.500.01 b. Which loan has the lower effective interest cost? LIBOR Prime