Company A and Company B are considering entering into an interest rate swap where A pays fixed and receives float, and B pays float and receives fixed. The fixed rate is 8% for three years. The floating rate is equal to prime + 2%, and prime is currently 7.2%. The notional of the swap is $100 million. She asks you to calculate the net payoff, or payment, to each of A and B assuming the following possible future changes in the floating prime rate:
1. Prime = 7.2%
2. Prime increases by 1%
3. Prime decreases by 3%