The spot-interest rate for 1, 2, 3, 4 and 5 years, respectively, are 7.0%, 6.0%, 5.0%, 4.5%. and 3.5% Determine the forward rate between years 3 and 5 (i.e. 0F3,5).

(a) Between 7.20% and 7.22%.

(b) Between 5.20% and 5.32%.

(c) Between 2.40% and 3.44%.

(d) None of the above.

Please show me the steps aswell used to get to the correct answer.