Firm A is paying $750,000 in interest payments a year while Firm B is paying LIBOR plus 75 basis points on $10,000,000 loans. The current LIBOR rate is 6.5%. Firm A and B have agreed to swap interest payments. What is the net payment this year?
A) Firm A pays $750,000 to Firm B
B) Firm B pays $725,000 to Firm A
C) Firm B pays $25,000 to Firm A
D) Firm A pays $25,000 to Firm B
E) None of these.

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The Answer of Firm A is paying $750,000 in interest payments a year while Firm B is paying LIBOR plus 75 basis points on $10,000,000 loans. The current LIBOR rate is 6.5%. Firm A and B have agreed to swap interest payments. What is the net payment this year?
A) Firm A pays $750,000 to Firm B
B) Firm B pays $725,000 to Firm A
C) Firm B pays $25,000 to Firm A
D) Firm A pays $25,000 to Firm B
E) None of these.

Firm a Is Paying $750,000 in Interest Payments a Year