You sell a two-year swap to exchange LIBOR for fixed-rate payments on a $100 million notional principal. LIBOR rates are as follows:One-year spot rate2% per year.Forward ratein the second year 3.5% per year. The present value of the floating-rate payments is currently estimated as:

a.[$2/(1.02) + $3.5/(1.02)(1.035)²] = $5.16 million

b.[$2/(1.02) + $3.5/(1.035)²] = $5.23 million

c.[$2/(1.02) + $3.5/((1.02)(1.035))] = $5.28 million

d.[$2/(1.02) + $3.5/(1.035)] = $5.34 million