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How much net interest payment will pratt make

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Question - On January 1, 20X3, Pratt enters into a 2-year, $100,000 variable-rate loan with interest payments occurring at the end of each year. Pratt enters into an interest rate swap agreement with another party whereby Pratt agrees to pay a fixed interest rate of 10% on the $100,000 loan to that party in exchange for receiving a variable amount based on the prevailing market rate. The 20X3 interest rates were Jan 1 10%, at June 30 11.2% at Dec 31 10.5%. How much net interest payment will Pratt make in 20X3?

a. $10,000

b. $11,200

c. $10,600

d. $10,500

e. $10,567

Reference no: EM132619334

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