Tyler borrowed $1000 for two years from CMX Bank at a variable interest rate. Tyler will make an interest payment to the bank at the end of each year based on the 1-year spot interest rate at the start of that year and also repays $1000 at the end of 2 years. The current one-year spot rate is 3% and the 2-year spot rate is 4%.

Tyler decided to enter into a two-year interest rate swap with annual settlement periods under which he will swap the variable interest rate for a fixed interest rate.

Determine the net interest payment that Tyler paid at the end of the first year.