A FI Buys a $500 Million Cap of 7 Percent

A FI buys a $500 million cap of 7 percent at a premium of 0.75 percent of face value. In addition,it sells $500 million floor of 3 percent at a premium of 0.70 percent of face value.
If interest rates rise to 7.25% what is the net profit of the FI?

A) −$1,250,000
B) −$250,000
C) $0
D) $1,000,000
E) $1,250,000