4. [2 marks] The table below lists the zero-coupon bonds with each having a maturity value of 1. Time to maturity 1 Year 2 Years 3 Years 4 Years 5 Years Price 0.97 0.93 0.88 0.82 0.75 Chen Casuality Company has a three year loan. The amount of the loan is 2,700,000 during the first year, Chen must pay the interest on the loan during the first year plus one-third of the principal. Additionally, at the end of the second year, Chen must pay the interest on the loan for the second year plus one-half the remaining principal. At the end of the third year, Chen must pay the interest for the third year plus all unpaid principal. The interest rate on the loan is a variable rate and will be reset annually to the one-year spot interest rate at the beginning of the year. Lingxiao, Chen's president, wants to enter into an interest rate swap so Chen will pay a fixed interest rate instead of a floating rate. Chen enters into an amortizing interest rate swap with terms to match the loan that accomplishes Lingxiao's objective. Calculate the swap rate on Chen's swap