New Hampshire Corp. has decided to issue three-year bonds denominated in 5,000,000 Russian rubles at par. The bonds have a coupon rate of 17%. If the ruble is expected to appreciate from its current level of $.03 to $.032, $.034, and $.035 in years 1, 2,and 3, respectively.

(a) Complete the following table

Year 1 Year 2 Year 3

Payments in rubles

Forecasted exchange rate of ruble

Payments in dollars

(b)What is the annual financing cost of these bonds in %?(show your calculation)