- This topic has 1 reply, 2 voices, and was last updated 12 months ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
Ripping Ltr has 50m fixed rate loan on which it pays int at the rate of 7.8% per year. The company would like to undertake a swap agreement with a bank to exchange the fixed rate commitment for a floating rate Commitment. A swap bank is prepared to pay a fix rate of int of 7.5% per year and to receive LIBOR in return. LIBOR during the first year was 7.1%
What is the effective interest rate for the company for the first year of the swap agreement.
Answer is 7.4%
I don’t understand pls show me the working.
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.