Petrol gas company, is borrowing $600,000,000 via a syndicated for six years at 70 basis points over LIBOR. LIBOR for the lean will be reset every six months. The funds will be provided by a syndicate of eight leading bankers, which will charge up- fees totaling 1.4 % of the principal amount. What is the effective interest cost for the first year if the annual LIBOR is 3.50% during the six months and 3.80% during the second six months.
The effective interest cost for the first year is %. (Round to two decimal places.)