Question: Answer is correct if you can please show how to solve. Thanks! 8. The table below presents the costs of borrowing for Caterpillar and Dell,

Answer is correct if you can please show how to solve.
Answer is correct if you can please show how to solve. Thanks!

8. The table below presents the costs of borrowing for Caterpillar and Dell, and the a Swap Bank quote against LIBOR. Caterpillar would like to get a $4,500,000.00 floating rate loan. Dell would like to get a $4,500,000.00 fixed rate loan. How much can Caterpillar save each year by entering a swap agreement? Fixed-Rate Floating-Rate Borrowing Cost Borrowing Cost 2.00 LIBOR 5.00 LIBOR + 2.90 Caterpillar Dell Swap Bank Quote Bid 2.04% Ask 2.09% (a) $4,050 (b) $1,800 (c) $450 (d) $2,250 (e) None of the above

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