How to Calculate Forward Rate?
Forward Rate calculator uses Forward Rate = Spot Exchange Rate*ln((Domestic Interest Rate-Foreign Interest Rate)*Time to Maturity) to calculate the Forward Rate, The Forward Rate formula is defined as the exchange rate at which a currency can be exchanged for another currency at a future date. It is determined by the interest rate differentials between the two currencies involved. Forward Rate is denoted by F_{o} symbol.
How to calculate Forward Rate using this online calculator? To use this online calculator for Forward Rate, enter Spot Exchange Rate (Sp), Domestic Interest Rate (r_{d}), Foreign Interest Rate (r_{f}) & Time to Maturity (T) and hit the calculate button. Here is how the Forward Rate calculation can be explained with given input values -> 40.86411 = 21*ln((0.9-0.2)*10).