5) Your relatives living in outside the Baku knows that you are studying ADA University and asking for your help. They are afraid of price of honey that will fall, which will have an effect on their profits.

They are asking you to compute 1 year forward price of honey. They tell you that the current price of honey is 25 AZN per kilogram, and the annual interest rates are 10%. They also say that the cost of store for one year is 1AZN per kilogram and must be paid upfront.

What is the 1 year forward price? (10 points)