Derive an annual effective forward rate from two annual effective spot rates.
It makes the prices, cash flows, rates, time periods, weights, and model conventions explicit so you can inspect an entered scenario without hidden live-market assumptions.
Calculation structure
Follow the stated model and units
(1+f)^(T−t) = (1+sT)^T ÷ (1+st)^t.
Visual explanation
See how the inputs become the result
Market at expiryContract payoff
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Premium and costsNet outcome
(1+f)^(T−t) = (1+sT)^T ÷ (1+st)^t.
Read the estimate correctly
Use the result within its boundaries
One-year spot 4% and two-year spot 5% imply a one-year forward rate about 6.01%.
This is a deterministic entered-cash-flow scenario, not a quote, credit assessment, tax calculation, or recommendation.
Quick guide
How to use this calculator
Enter contractual cash flows, prices, rates, dates or day counts, and frequency assumptions.
Use one consistent currency and the exact nominal/effective convention shown.
Read the callable, curve, day-count, and duration limitations before interpreting the result.
Calculation method
Calculation method
(1+f)^(T−t) = (1+sT)^T ÷ (1+st)^t.
Iterative yields and curve results use bounded numerical solves and are marked approximate.
Worked example
Worked example
One-year spot 4% and two-year spot 5% imply a one-year forward rate about 6.01%.
(1+f)^(T−t) = (1+sT)^T ÷ (1+st)^t.
Supported inputs
Precision and limits
Visible input limits
At most 1,200 cash-flow periods or rows are supported. Payment periods must be whole and formula domains are validated explicitly.
International scope
No issuer, currency, exchange, settlement date, holiday calendar, day-count convention, tax rule, credit rating, yield curve, or contract term is selected automatically.
Decision boundary
Outputs are entered scenarios, not executable prices, credit opinions, duration hedges, call forecasts, risk limits, or recommendations.
Calculator-specific assumptions
This is a deterministic entered-cash-flow scenario, not a quote, credit assessment, tax calculation, or recommendation.
