question on 1year gold fwd price should, forward, company, contract, question

slackeranalyst

Suppose that the 1year gold lease rate is 1.5% and the 1year riskfree rate is 5%. Both rates are compounded annually. You entered into a forward contract with a hedger whereby you agree to buy large amounts of gold at fixed price (F). What is the maximaum 1year gold forward price you should quote to the goldmining company when the spot price is 600$ ?

scr879

the logic is at time 0, you borrow gold from a central bank at lease rate 1.5% and sell it at current market price (600$). at time in 1year, you buy gold from the gold mining company at fixed price F and use it to repay the central bank.
Thus th calculation is 600*1.015*1.05 = 639.45.
Does it make sense?