whew1110

You can’t just take the 180-day LIBOR and divide it by 2 to determine the floating rate. The example, “skips” the calculation of how the 0.045 number was arrived at. Go back to example 4 to see how the floating rate was calculated in part B. Example 8 doesn’t include some of the other inputs you’d need to calculate floating rate at the end of the first year. In short, I’d take the 0.045 at its face value without worrying about how it was arrived it.