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