A swap agreement calls for Durbin Industries to pay interest annually based on a rate of 1.5% over the one-year T-bill rate, currently 3%. In return, Durbin receives interest at a rate of 6% on a fixed-rate basis. The notional principal for the swap is $100,000. What is Durbins net interest for the year from the agreement?

A.

Durbin receives $1,500

B.

Durbin pays $6,000

C.

Durbin pays $1,500

D.

Durbin receives $7,500