A company based in Germany has a British subsidiary. The subsidiary generates 3,000,000 a year, received in equivalent monthly instalments of 250,000. The British company wishes to convert the pound cash flows to euros every month of a year. It plans to engage in a currency swap in order to lock in the exchange rate at which it can convert the pounds to euros. The current exchange rate is 0.8000/. The fixed rate on a plain vanilla currency swap in pounds is 2.4% per year, and the fixed rate on a plain vanilla currency swap in euros is 3% per year. Determine the notional principal of the swap in euros and in pounds that will be large enough to monthly convert 250,000 pounds to euros.

Please show your workings and the correct answers as follows in the space provided below:

Notional amount of swap in pounds:

Notional amount of swap in euros: