Petrol Ibrico, a European gas company, is borrowing

$600,000,000

via a syndicated eurocredit for six years at

90

basis points over LIBOR. LIBOR for the loan will be reset every six months. The funds will be provided by a syndicate of eight leading investment bankers, which will charge up-front fees totaling

1.1%

of the principal amount. What is the effective interest cost for the first year if the annual LIBOR is

3.70%

during the first six months and

4.10%

during the second six months.