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ScotTel International can borrow US$7m at LIBOR plus a lending margin of 95 basis points per annum on a three-month rollover basis from the Royal

ScotTel International can borrow US$7m at LIBOR plus a lending margin of 95 basis points per annum on a three-month rollover basis from the Royal Bank of Scotland. The current three-month US$ LIBOR is 6 1/4%. Suppose that over the next three month period US$ LIBOR rises to 5 13/32%. How much will ScotTel pay in interest to the RBS over those six months of it Eurodollar loan?

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