Can someone please explain the logic behind the formula? I am confused on this topic. Any insight is greatly appreciated!
I wrote a couple of articles on this:
- Calculating forward rates from spot rates: http://financialexamhelp123.com/calculating-forward-rates-from-spot-rates/
- Calculating spot rates from forward rates: http://financialexamhelp123.com/calculating-spot-rates-from-forward-rates/
(Full disclosure: as of 4/25/16 there is a charge to read the articles on my website. You can get an idea of the quality of the articles by looking at the free samples here: http://www.financialexamhelp123.com/sample-articles/.)
There’s lots of good stuff there.