The following information was available as of the close of business June 1, 2004, on the government of Canada bonds.

Coupon	Maturity	Price	Yield
6.00%	June 1, 2005	111.85	2.79
12.40%	June 1, 2006	114.10	3.45
10.40%	June 1, 2007	109.31	3.58

Calculate the anticipated one-year interest rate for 2006 (up to June 2007). (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

Interest rate
2nd year	%
3rd year	%