Suppose that in order to hedge interest rate risk on your lending, you enter into an FRA that will guarantee a 6.1% effective annual interest rate for 1 year on $4,000,000. On the date you lend the $4,000,000, the actual interest rate is 6.8%. To settle the FRA on the date the loan is repaid, you would...

a.

pay $28,000.

b.

pay $26,217.

c.

receive $28,000.

d.

receive $26,217.

please explain steps