Daniel firms took external finance of $700,000 and pays interest annually basing on LIBOR. The loan will be paid back at the end of 4th year with a variable rate of LIBOR + 20 Basis points. The firm wants to swap the variable rate for a fixed rate of 5.70%. What will be the net swap if the LIBOR rate is 5.30%?

Answer choices:

a. $137,200

b. $11,200

c. $1,400

d. $4,200