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You have borrowed $7.5 million at a rate of LIBOR +1.2%, and you wish to completely eliminate your interest rate risk. To do so, you

You have borrowed $7.5 million at a rate of LIBOR +1.2%, and you wish to completely eliminate your interest rate risk. To do so, you are going to use a interest rate swap where the fixed leg pays 3.2% and the variable leg pays LIBOR +1. What would your yearly interest payment be if you you used this swap to hedge against interest rate movements?

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