Currency Forward Contract Valuation

Medium Forward Pricing And Valuation Currency Forwards

XYZ Corp., a U.S.-based company, has entered into a 6-month currency forward contract to exchange USD for EUR at a rate of 1.14 USD/EUR. The current spot exchange rate is 1.12 USD/EUR, while the annual interest rate for USD is 2% and for EUR is 1%. Assume that both currencies are quoted to four decimal places.

What is the theoretical forward exchange rate for the currency forward contract?