Derivatives Blue Box Question Currency Swaps

The swaps part is really confusing me. It would be really great if someone who has recently solved this question could possibly help me.

The question that I have doubt in is the Example 16 (Currency swap valuations with Spot rates) on Pg 317.

The solution says that the value of swap is:

100,000,000[0.027695(3.967683) + 0.986031] – 1.13(87,719,298)[0.002497(3.994841) + 0.998336]

Shouldn’t it be :

100,000,000[(0.027695/4)(3.967683) + 0.986031] – 1.13(87,719,298)[(0.002497/4)(3.994841) + 0.998336]

Because the coupons are being paid quarterly and the rates 2.7695% and .2497% are annual.

Thanks in advance.

I’m not sure because i usually don’t use the formula when I value a swap (because it’s a bad boy, as Darren Degraaf would say), but the 3.967683 and 3.994841 times the notional times the rate are like the present values of the remaining four coupons i think?, so they are like the coupons value you would be receiving for the entire year of the swap, I think in that case you should not unannualized the rates.

Please correct me someone if i’m wrong

Steve11 you are correct, see errata: