For three decimal places at one plus onehalf the value of interest on
The basis of the argument forthis approach is that because the rate has been fixed contractually, the payment does notchange because there are subsequent changes in the market rate. This is because more compound interest is earned, which reduces the amount that must be saved today to be worth a specified sum in the future. The variable interest rate during each oneyear settlement period will be the oneyear spot interest rate at the start of the settlement period. Lump sum amount to be received at the end of 10 years at annual interest.