Yes cycling as well as swimming are great low-non impact excercises, the benifit of swimming is you get an upperbody workout too. 7 days a week is a bit much, give yourself a couple of days rest and mix up the excercises, say for instance 3 days on the bike and 2 days swim, also ski machines are supposed to be very good low impact excercise if you have access.

Where does the problem with your knees stem from? try strengthening the muscles surrounding your knee. Quads and hamstrings are the muscles that flex and extend our knees. Leg extensions and leg curls will strengthen these muscles and take some pressure off your knees.

With regards to the weight loss your excercise coupled with a calorie controlled diet will do the trick

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