Looking at this “who bears credit risk in a a forward” question. I understand that there is no discounting for the F and S prices for this particular case, however, I am wondering, if there was discounting, what does this mean :

**"Compound annual interest rates for the two-year period: 1 percent in JPY and 10 percent in ZAR."**

Does it mean you wouldn’t raise 1.01 and 1.10 to the power of 2? My understanding is these are still annual rates, so to discount it back by 2 years, you would raise to 2: 1/(1.01^2) and 1/(1.10^2)

Thanks for any clarification!