A semiannual interest rate swap contract

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On 3/5/2012, you entered into a semiannual interest rate swap contract, where you pay a fixed rate of 4% per annum and receive LIBOR on a principal amount of $1,000,000. Suppose the 6-m LIBOR rates were 5.00% on 3/5/2012 and 5.50% on 9/5/2012. What is the net cash flow of the swap contract on 9/5/2012?

I know the answer is $5000. I need the work shown as to how that answer was gotten step by step.

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Reference no: EM13241161

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