Please show me the math for the following:
FV = -$2,500, n = 1.5, I = 0.25% (2,491)
from the following:
Key Variables January February March
Number of units per contract 5,000 5,000 5,000
Spot price per unit $90.20 $90.50 $90.60
Forward rate per unit $91.50 $91.20 $90.60
Original forward rate per unit $92.00 $92.00 $92.00
Fair value of forward in future $s:
Original forward value:
(5,000 × $92) $460,000 $460,000 $460,000
Current forward value:
5,000 × $91.50 $457,500
5,000 × $91.20 $456,000
5,000 × $90.60 $453,000
Change - Gain (loss) in forward
value $ (2,500) $ (4,000) $ (7,000)
Discount rate 6% 6%
Present value of the above fair value:
FV = -$2,500, n = 1.5, I = 0.25% (2,491)
FV = -$4,000, n = 0.5, I = 0.25% (?)
FV = -$7,000, n = 0.0, I = 0.25% (?)
Current present value (2,491) (?) (?)
Prior present value 0 (?) (?)
Change in present value (2,491) (1,504) (3,005)