Mathematics · Aptitude
A company plans to borrow $5 million in six months. The current interest rate is 8%. It purchases an interest rate cap at a strike rate of 8.5% for a premium of $5,000. If the interest rate rises to 9.0% in six months, what is the gross payout from the cap?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$20,000
- 2$50,000
- 3$25,000✓
- 4$0
Correct answer
$25,000
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