In regards to vanilla interest rate swaps

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Reference no: EM131884089

1. In regards to vanilla interest rate swaps:

What is the notional amount? Why is it used in converting a variable rate loan to a fixed payment loan? Please explain.

2. What is the present value of an annuity of $500 per year ( first cash flow occurs one year from today) for 7 years if the interest rate is 15% p.a.?

Reference no: EM131884089

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