1- Assume: annual inflation rate is 3.5% in the U.S. and 1.5% in the U.K.; the current spot rate is $1.50/

Calculate the price of USD 1year from now based on relative PPP. Write your answer as a number with 4 digits after the decimal point, e.g. *.1234.

2- Assume: annual inflation rate is 3.5% in the U.S. and 1.5% in the U.K.; the current spot rate is $1.50/. Based on the relative PPP, S₃($/), the future spot rate in 3 years, is ? Write your answer as a number with 4 digits after the decimal point, e.g. *.1234.