1. Consider the following spot interest rates for maturities of one, two, three, and four years. r1=2.10% r2=2.59% r3=3.92% r4=3.43% What is the three year forward rate one year from now (in percent)? Use the exact formula. Answer to two decimals, carry intermediate calcs. to four decimals.
2. Phoebe realizes that she has charged her credit card too much and racked it up $5900 in debt. If she can pay$225 each month and the card charges 16% APR (compounded monthly) how long will it take her to pay off the debt?