Assume that there are three annual paying coupon bonds (Bond X, Y and Z) in issue that all have a nominal value of R13 700 and are redeemable in the 1st year, 2nd year and 3rd year respectively. Bond X, which is redeemable in a years time, has a coupon rate of 8% and is trading at R14 110. Bond Y, which is redeemable in two years, has a coupon rate of 6% and is trading at R13 980. Bond Z, which is redeemable in three years, has a coupon rate of 4% and is trading at R13 200.

Determine the annual spot growth rates for the three years and discuss what patterns you see from the results