Petrol Ibrico, a European gas company, is borrowing $650,000,000 via a syndicated euro credit for six years at 70 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 1.6% of the principal amount. What is the effective interest cost for the first year if the annual LIBOR is 4.00% during the first six months and 4.30% during the second six months

The effective interest cost for the first year is

%.

(Round to two decimal places.)