Assume that Interest Rate Parity holds. The spot rate for the Euro is $1.20 and the one year forward rate is $1.23. The annual rate of interest in Germany on annual deposits is 2.439%. What is the annual rate of interest on deposits in the United States?© BrainMass Inc. brainmass.com September 19, 2018, 6:40 pm ad1c9bdddf - https://brainmass.com/business/interest-rates/calculating-the-interest-rates-by-using-irp-concept-548437
Spot Rate of Euro=$1.20
Forward Rate of Euro=$1.23
Interest Rate in Foreign country=2.439%
Interest Rate in Home ...
Solution depicts the steps to calculate the interest rate by using concept of "Interest Rate Parity".