Reading 42 - Concept Checker #9 understand, effective, receiving, believe, correct

jcole21

When calculating the effective annual rate of the loan if LIBOR is 4.5% at expiration, I don’t understand why you are ADDING the $2,020 to the denominator instead of subtracting it.
I believe you would subtract it if you were receiving the money (borrower), but this example you are the lender. However, buying the put should still be a cost to you, correct? So in that case, why would you be adding it?