Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000 . She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%. Emily’s annual explicit cost of capital is

a. $2,000.
b. $4,000.
c. $12,000.
d. $14,000.


c. $12,000.