how did cfai get the FV of the storage cost to be -0.0305, -0.0309?
storage cost is 0.03 and compounded interest is 6%
.03 * 1.06^(3/12) time from June Payment until sept 3 months
.03 * 1.06^(6/12) time from March until sept 6 months
layout the cashflows on a time line
June Payment bring forward 3 months
March Payment bring forward 3 months
September its already at that point in time t.
notice it’s continuously componding rate.
for the june payment 03 * 1.06^(3/12) = 3.04. is the .01 difference rounding?
Good catch Tulkuu
Its .03*e^(.06*3/12)
and
.03*e^(.06*6/12)
the .01 difference that Tulkuu pointed out about continuously compounding.