In practice problem 4 of reading 37, when we cumulate our overpayment in Yr 1 to Yr 2 we multiply the overpayment of Yr 1 by 1.070024. This i presume is the interest rate factor or the implied forward rate between years one and two. how is the value of 1.070024 calculated??
yes its a forward rate yr1 to yr2 1.065^2/1.06=1.070024
thanks