Agreed to pay libor-floating rate side of the swap

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Boeing has entered into a 10 year interest rate swap with Bank America with a notional principal of $500 million. Boeing has agreed to pay LIBOR – the floating rate side of the swap. Bank America has agreed to pay a fixed rate of 7%. Assume that next year, LIBOR is 6.5%. The net payment at that date will be:?

A. Boeing pays Bank America $2,500,000

B. Bank America pays Boeing $2,500,000

C. Bank America pays Boeing $502,500,000

D. Bank America pays Boeing $3,750,000

E. Boeing pays Bank America $3,750,000

Reference no: EM131089314

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