Question: Calculate the gross payments involved and indicate who pays what in this swap deal.
The next two questions use the following information:
Esandel Bank enters into a plain vanilla interest rate swap with a swap facilitator Londoner Inc. Esandel pays a fixed amount of 8 percent per year to Londoner, which in turn pays a floating amount bbalibor +1.50 percent. The principal is $15 million. The swap lasts for five years, and the payments take place at the end of each year.