The future price for gold for the 6-month contract should be $1,597.51
How to calculate the future price?
The future price is calculated using the formula given below:
Future price = spot rate*e((rate+ storage cost)*time)
Here ‘e’ is Euler’s number which is used in case of continuous compounding and the value is approximately 2.71828
Future price = spot rate*e((3.5% + 2.5%)*6/12)
= $1,550 *e((6%)*0.50)
= $1,550 *e(3%)
= $1,550 *1.030455
= $1,597.2053
= $1,597.21
Note: The difference is due to rounding off error.
The future price for gold for the 6-month contract should be $1,597.51
To find out more about Euler's number, check out:
https://brainly.com/question/28446206
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