Question: (Please Use Excel to Solve) A swap has a maturity of two years. One leg of the swap involves paying LIBOR plus 0.4% and the

(Please Use Excel to Solve) A swap has a maturity of two years. One leg of the swap involves paying LIBOR plus 0.4% and the other leg has a fixed cash flow of 5.02%. Currently LIBOR is 3.8%. It is expected to increase to 4.2% in six months then fall to 3.9% six months after that. Finally, it should increase to 4% after another six months. What is the value of the swap? (Report your answer in dollars to the nearest penny assuming notional principal of $100.)

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