Company X and Company Y enter into an interest rate swap contract to swap fixed for floating interest rates for a notion

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Company X And Company Y Enter Into An Interest Rate Swap Contract To Swap Fixed For Floating Interest Rates For A Notion 1 (57.55 KiB) Viewed 47 times

Company X and Company Y enter into an interest rate swap contract to swap fixed for floating interest rates for a notional amount of $800,000. The term of the interest rate swap is two years, and the interest payments will be swapped every six months. The fixed-rate on the swap is 3.85%, while the floating rates on the swap are as follows: . 6-Month LIBOR Now 3.60% . 6-Month from now 3.80% 12-Month from now 4.00% 18-Month from now 4.20% What is the net payment that will be exchanged by the two counterparties in 12 months (if the LIBOR rates stay at the levels above)? +400 +1000 O -600 +200