# How to calculate basis points

What is the formula to calculate 350 basis points?

GENERAL TERMS AND CONDITIONS:
1) The loan amount will be up to \$12,175,000.00.
2) The Use of Proceeds will be for development of subject property.
3) The interest rate shall be libor plus 350 basis points.
4) The loan term shall be 24 months.
5) The collateral shall be a first mortgage on the subject property.

 ebaines Posts: 10,589, Reputation: 5794 Expert #2 Aug 27, 2008, 10:28 AM
A basis point is 1/100 of a percentage point. So 350 basis points is 3.5%.

The LIBOR rate varies depending on the length of term, either 3-month, 6-month, or 1-year - right now it vaires from about 2.4% to 3.2%, depending on the term. So this loan would cost you somewhere between 5.9% and 6.7%.
 Need_to_Know Posts: 3, Reputation: 1 New Member #3 Aug 27, 2008, 10:47 AM
Excellent Answer, Thank you so very much.

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