These equations together provide boundaries which futures price will be in equilibrium. The first equation establishes the upper boundary, and the second equation the lower boundary. For example, assume that the borrowing rate is 8% per year, or 2% for 3 months, while the lending rate is 6% per year, or 1.5% for 3 months. Therefore, the upper boundary for the theoretical futures price is:

*use formula:

F=P+P(rBy)