The table below shows the information for exchange rates, interest rates and inflation rates in the US and Germany. Answer the following questions.

Current Spot rate: $1.60/

One-year forward rate: $1.58/

Interest rate in the US: 2%

Interest rate in Germany: 4%

Inflation rate in the US: 2%

Inflation rate in Germany: 3%

a) If you borrowed $1000 for 1 year, how much money would you owe at maturity?

b) Find the 1-year forward exchange rate in $ per that satisfies IRP from the perspective of a customer that borrowed $1000 traded for at the spot and invested in Germany.