An investor purchases a cap on 7/1/20 for an initial premium of 1.65% of the notional amount. The terms of the cap include the following:

1) The notional amount is $250,000,000

2)The reference rate is 3-month LIBOR

3) The maturity of the contact is 1 year

4) Cap payments are made quarterly

5) The strike price is 2.45%

6) The payment is based on actual/360 day count

LIBOR for the 10/1/20, 1/1/21, 4/1/21, and 7/1/21 LIBOR reset dates is 1.7575%, 2.2825%, 2.7175%, and 3.1250%, respectively.

a) What is the amount of the initial premium payment? Which party pays? What is the amount of each cap payment? Which party pays?