3. Larrys Fine Bank granted a $10,000,000 loan to Bobby Segers Ammo Shop at a floating rate of one year LIBOR plus 4.25%. The bank thinks that interest rates are going to go down, but wants to protect its NIM. One year LIBOR is currently 4%, so the bank is receiving 8.25% (4.00% LIBOR plus the spread of 4.25%). The bank can buy a 30 day LIBOR floor of 2.00% for $40,000 per year. If LIBOR goes to 1%, what is the net payment? Show the cash flows What is the minimum effective interest rate with the floor?