Author Question: In three years you will begin receiving an annual payment of 600 that will be made for two years. If ... (Read 30 times)

tuffie · **on:** Jul 10, 2018

In three years you will begin receiving an annual payment of 600 that will be made for two years. If the annual interest rate is 12, what will be the balance in your account at the end of the fourth year?

A) 2,025
B) 1,344
C) 1,272
D) 1,200
E) 1,260

Question 2

What is a forward exchange rate?

What will be an ideal response?

welcom1000 · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

C

Answer to Question 2

The spot exchange rate is simply the price of one currency stated in terms of another with immediate delivery. Another
type of transaction carried out in the foreign exchange markets is known as a forward exchange rate, which is an
exchange rate agreed upon today but which calls for delivery of currency at the agreed-upon rate at some future date.
The actual payment of one currency in exchange for the other takes place on a future date called the delivery date, and
the agreement that captures the terms of both the rate and delivery is called a futures contract or forward exchange
contract.