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(1 pt) Suppose the spot rate table is as follows Years rate 1 5.571% 2 6.088% 3 6.555% 4 6.978% The rates in this table
(1 pt) Suppose the spot rate table is as follows Years rate 1 5.571% 2 6.088% 3 6.555% 4 6.978% The rates in this table are for funds to be lent starting now but for different lengths of time For example, the first rate in this table is for funds to be lent for one year, starting now, and the second rate in this table is for funds to be lent for a period of two years, starting now. Interest is compounded annually. Let do,j be the discount factor for the time interval from 0 to j years. Cash to be received at j years in the future, is multiplied by do.i to determine the present value of the cash. Assuming the above rates and annual compounding of interest, 0,1 0,2 0.3 0,4
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