The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge her interest rate exposure. She will sell five Treasury futures contracts at $$107,000$ per contract. It is July and the contracts must be closed out in December of this year. Long$-$term interest rates are currently $7\mathrm{.}30$ percent. If they increase to $8\mathrm{.}50$ percent, assume the value of the contracts will go down by $10$ percent. Also, if interest rates do increase by $1\mathrm{.}2$ percent, assume the firm will have additional interest expense on its business loans and other commitments of $$63,000.$ This expense, of course, will be separate from the futures contracts.