Shows you how to calculate the forward rate given a yield rate at time 1, and a yield rate at time 2.

1. Forward Rate
● Expectations of future bond rates
● Takes a zero-coupon bond yield rate from time 0 to t1
● Takes a zero-coupon bond yield rate from time t1 to t2
● Calculates a ratio to get the forward rate
1

2. Forward Rate Formula
● t1
● r1 = Yield Rate for t0 --> t1
● t2
● r2 = Yield Rate for t1 --> t2
(1 + r2)t2
---------------
(1 + r1)t1
2

3. Forward Rate Calculator
https://www.mathcelebrity.com/forwardrate.php
3