Question: Dr. Ruth is going to borrow $6,000 to help write a book. The loan is for one year and the money can be borrowed at

Dr. Ruth is going to borrow $6,000 to help write a book. The loan is for one year and the money can be borrowed at either the prime rate or the SOFR rate. Assume the prime rate is 11 percent and SOFR 2.5 percent less. Also assume there will be a $70 transaction fee with SOFR (this amount must be added to the interest cost with SOFR). What is the effective interest rate on the SOFR loan? Note: Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Which loan has the lower effective interest cost? multiple choice SOFR Prime

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