Given the current (today's) interest rate structure (assume that there are no transactions costs in the marketplace and discrete annual compounding) Year Interest Rate 1 5 75 2 6 5 3 8 75 What is the one year forward rate, two years in the future (That is, what is the one year forward rate implied by the current interest rate on the three year contract ) I have to show work Thank you

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Question: Given the current (today's) interest rate structure (assume that there are no transactions costs in the marketplace and discrete annual compounding): Year Interest Rate 1

Given the current (today's) interest rate structure (assume that there are no transactions costs in the marketplace and discrete annual compounding):

Year	Interest Rate
1	5.75%
2	6.5%
3	8.75%

What is the one year forward rate, two years in the future? (That is, what is the one year forward rate implied by the current interest rate on the three year contract?)

I have to show work. Thank you!

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