Skip to content
ENExplore Calculators

Forward Premium Calculator

Work out forward premium instantly with clear inputs, formula shown and shareable results.

About Forward Premium Calculator

The forward premium is the percentage gap between forward and spot, annualised to make tenors comparable. Under covered parity it equals the interest rate differential, so a premium far from that gap signals a market dislocation.

Formula

Forward premium

Premium = (F - S)/S; annualised = premium × 365/days

Worked example

With the default values below, Forward Premium Calculator returns Annualised Forward Premium of 3.0502%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Spot Rateaccepts 0–100,000
83.1
Forward Rateaccepts 0–100,000
84.35
Days To Maturityaccepts 1–1,095
180

Results

Annualised Forward Premium
3.0502%
Premium Over The Period
1.5042%
Forward Points
1.2500
Implied Interest Differential In Basis Points
305.0

Step by step

  1. 1Values used
  2. 2Forward premium
  3. 3Annualised Forward Premium= 3.0502
  4. 4Premium Over The Period= 1.5042
  5. 5Forward Points= 1.2500
  6. 6Implied Interest Differential In Basis Points= 305.0

Assumptions and limits

  • The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

What does a large premium imply?

A wide interest differential, or in stressed markets a shortage of one currency in the funding market.

Is the premium a hedging cost?

In cash-flow terms yes. It is the certain cost of removing exchange rate uncertainty.

Related Calculators

Forward Premium Calculator | Calcrivo