Two different banks can get loans according to the following table. Assume the Fed Funds Rate starts at 4%.

	Fixed Rate	Floating Rate
Bank A	10%	5% + Fed Rate
Bank B	8%	4% + Fed Rate

Suppose that the stronger credit bank wants to end up with a variable-rate liability, and the weaker credit bank wants to end up with a fixed-rate liability. Both banks are going to borrow $10,000,000 each. If they borrow from their respective markets and do NOT do an interest rate swap, what annual interest (in $) paid on the loans for both banks combined?

Suppose the economic benefit of this swap is split between both banks evenly, and the fed funds rate remains at 4%. After the swap agreement, how much annual interest is the stronger credit bank paying?

Note that the primary lending market is not aware of this swap, as it is a private contract between the two banks. For example, if the stronger credit bank borrows $10,000,000 at 8% from the primary lending market, then they are obligated to pay the lender $800,000 of interest, which will likely be different than the net amount that they are supposed to pay out according to the swap contract.

How much money (in $) must the weak bank transfer to the large bank annually in order to honor the swap contract?