Suppose that at the present time, one can enter 5-year swaps that exchange LIBOR for 5%. An off-market swap would then b

[answerhappygod]

Suppose that at the present time, one can enter 5-year swaps
that exchange LIBOR for 5%. An off-market
swap would then be defined as a swap of LIBOR for a fixed
rate other than 5%. For example, a firm with 7% coupon debt
outstanding might like to convert to synthetic floating-rate debt
by entering a swap in which it pays LIBOR and receives a fixed rate
of 7%. What up-front payment will be required to induce a
counterparty to take the other side of this swap? Assume notional
principal is $10 million. (Do not round intermediate
calculations. Round your final answer to the nearest dollar
amount.)