How it works
Two simple-interest money-market accumulation factors for the same term give a theoretical forward exchange relation. This form solves for quote-currency interest rate; enter the known quantities in Theoretical forward rate, Spot exchange rate, Base-currency interest rate, Term in years.
Inputs and units
| Input | Example value | What to enter |
|---|---|---|
| Theoretical forward rate | 1.02 | Formula symbol: forward. Enter a numeric value. Must be greater than zero. |
| Spot exchange rate | 1 | Formula symbol: spot. Enter a numeric value. Must be greater than zero. |
| Base-currency interest rate | 3 % | Formula symbol: foreign. Enter the percentage as a number: for 15%, enter 15. Allowed range: -99–100. |
| Term in years | 1 yr | Formula symbol: time. Required unit: yr. Must be greater than zero. Allowed range: 0.000001–100. |
Worked example
Show example inputs and results
This example is generated by the same calculation engine using the starting values in the form. Your own inputs produce your own result.
- Theoretical forward rate
- 1.02
- Spot exchange rate
- 1
- Base-currency interest rate
- 3 %
- Term in years
- 1 yr
Complete example results
- Quote-currency interest rate
- 5.06 %
Reading the result
The result solves for quote-currency interest rate from the entered quantities. Check the result unit and the formula conditions before using it.
Questions and answers
Can I use the example values for my own calculation?
The example values illustrate the calculation. Replace every input with your own information, especially dates, rates and the selected operation.
When can I use the quote-currency interest rate result?
Spot and forward values need the same quotation direction. Simple interest, matching terms and positive factors are required; spreads, collateral and market basis are excluded.
Why are some results rounded?
Results display up to 8 decimal places. Calculations use the unrounded values; very small values use scientific notation. JavaScript floating-point arithmetic can introduce tiny rounding differences.
Are my inputs sent to a server?
The calculator processes inputs in your browser. Its code does not send your values to a server.
Method sources: ocw.mit.edu