You are given the information below concerning expected real rates and expected inflation rates or each of the next five years. Assume that you wish to buy a $3-$year, zero coupon security that you will hold over Years $3,4,$ and $5,$ and which will mature for $$1,000$ at the end of Year $5.$ Also assume that the maturity risk premium $($MRP$)$ can be defined as equal to $(0\mathrm{.}15\%)*($t$-1),$ where t is equal to the number of years until maturity. Based on this information, determine how much you expect to pay for this $3-$year, zero coupon security when you purchase it in $2$ years. $($Hint: determine the $3-$year nominal rate for Years $3-5$ and then add the MRP$.)$

Year K$*$ Average K$*$ Inflation Average IP Kn Kf

$12\mathrm{.}00\%2\mathrm{.}00\%6\mathrm{.}00\%6\mathrm{.}00\%8\mathrm{.}00\%8\mathrm{.}00\%$

$22\mathrm{.}00\%2\mathrm{.}00\%5\mathrm{.}00\%5\mathrm{.}50\%7\mathrm{.}50\%7\mathrm{.}00\%$

$32\mathrm{.}00\%2\mathrm{.}00\%4\mathrm{.}00\%5\mathrm{.}00\%7\mathrm{.}00\%6\mathrm{.}00\%$

$43\mathrm{.}00\%2\mathrm{.}25\%3\mathrm{.}00\%4\mathrm{.}50\%6\mathrm{.}75\%6\mathrm{.}00\%$

$53\mathrm{.}00\%2\mathrm{.}40\%3\mathrm{.}00\%4\mathrm{.}20\%6\mathrm{.}60\%6\mathrm{.}00\%$