What this calculator does
Implied forward rate works out the interest rate implied for a future period by two spot rates of different maturities. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
The inputs explained
| Field | What to enter |
|---|---|
| Spot rate for the longer period (%) | A number, measured in %. Starts at 6. |
| Longer period (years) | A number. Starts at 5. |
| Spot rate for the shorter period (%) | A number, measured in %. Starts at 3. |
| Shorter period (years) | A number. Starts at 3. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with spot rate for the longer period
Every other input is held at the calculator’s starting values while spot rate for the longer period varies. Select any row to load that scenario into the calculator.