Consider a 3-year annual currency swap that takes place between a foreign firm (FF) with FC currency units and a United States firm (USF) with $ currency units. USF is the fixed-rate payer and FF is the floating-rate payer. The fixed interest rate at the initiation of the swap is 7%, and 8% at the end of the swap. The variable rate is 5% currently; 6% at the end of year 1; 8% at the end of year 2; and 7% at the end of year 3. At the beginning of the swap, $1.0 million is exchanged at an exchange rate of FC2.0 = $1.0. At the end of the swap period the exchange rate is FC 1.5 = $1.0. At the end of year 3, USF will pay which of the following total amounts (notional principal plus interest)?

$1.08 million

FC2.16 million

FC2.14 million

$2 million