solution;
Let x be the forward interest rate p.a. (so that the rate for six months is x/2).
(1,03)(1 +x/2) =1,065
1 +x/2 =(1,065)/(1,03)
x/2 =[(1,065)/(1,03)] -1
x=2{ [(1,065)/(1,03)] -1}
Therefore x=0,068, i.e. 6,8% p.a
jim items answered the question on November 13, 2018 at 17:55
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