Calculate first payment and indicate which party pays which

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A U.S. company has entered into an interest rate swap with a dealer in which the notional principal is $50 million. The company will pay a floating rate of LIBOR and receive a fixed rate of 5.75 percent. Interest is paid semiannually, and the current LIBOR is 5.15 percent.

Calculate the first payment and indicate which party pays which. Assume that floating-rate payments will be made on the basis of 180/360 and fixed-rate payments will be made on the basis of 180/365.

Reference no: EM131445431

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