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Forward Rate Calculator

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

About Forward Rate Calculator

The forward rate is the future borrowing rate already implied by today's yield curve: investing to the far date must pay the same as investing to the near date and rolling at the forward. An upward-sloping curve therefore implies forward rates above spot.

Formula

Implied forward

(1+f)^(t2-t1) = (1+z2)^t2 / (1+z1)^t1

z1
Near spot rate
z2
Far spot rate
f
Forward rate

Worked example

With the default values below, Forward Rate Calculator returns Implied Forward Rate of 5.2019%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Spot Rate To Near Dateaccepts 0–100 %
4.2 %
Near Maturity In Yearsaccepts 0.25–50
2
Spot Rate To Far Dateaccepts 0–100 %
4.8 %
Far Maturity In Yearsaccepts 0.5–60
5

Results

Implied Forward Rate
5.2019%
Forward Period
3.00 years
Forward Above Far Spot Rate
0.4019%
Growth Over The Forward Period
16.4316%

Step by step

  1. 1Values used
  2. 2Implied forward
  3. 3Implied Forward Rate= 5.2019
  4. 4Forward Period= 3.00 years
  5. 5Forward Above Far Spot Rate= 0.4019
  6. 6Growth Over The Forward Period= 16.4316

Assumptions and limits

  • The result is derived only from the 4 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.

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

Frequently Asked Questions

Is the forward rate a forecast?

Only in a no-arbitrage sense. It is the break-even rate, not a prediction, and it embeds a term premium.

What if the curve is inverted?

Then the forward rate falls below both spot rates, which is why inversions are read as expected rate cuts.

Related Calculators

Forward Rate Calculator – Calculate Implied Forward Rate