Calculate the amounts received by a and b

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a) Two counterparties, A and B, agreed on a five-year interest rate swap, whereby A received annual payments based on a floating interest rate and B received annual payments based on a fixed interest rate. The notional principal is AUD100,000 and the fixed rate is 6 per cent. The floating interest rate assumed the following values on the payment dates:

Payment date Interest rate

2016 8.25
2017 9.75
2018 5.50
2019 4.75
2020 6.00

Calculate the amounts received by A and B on each payment date.

Reference no: EM132953030

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