How to calculate this FRA

I'm not sure if FRAs should be calculated with annual interest or with monthly interest. Example:

Amount : 10.000

Interest rate contracted: 10% per annum.

Period-term to 3 months within 3 months.

Interest rate in the market within 3 months: 1% monthly.

So this is a: $$FRA(3,6)$$

Should I convert the $$10$$% to quarterly interest and the $$1$$% to quarterly interest, or the $$1$$% to annual, in order to solve this FRA?

• well a 3M FRA settles to 3M Libor so what is the market expected 3M Libor rate over your specific dates? Having knowledge of 1% rate per month seems distracting to me. – Attack68 Jan 19 at 19:06