To calculate the effective exchange rate of a loan + interest rate call, you must first calculate the future value of the interest rate call, and *subtract* this amount from the amount of the loan. This makes sense to me, because we purchase the call, and should subtract it from the loan we receive.

However, for interest rate puts, we calculate the future value of hte interest rate put, and then *add* this amount to the amount of the loan. Why would we add the cost of the put to the loan if we are purchasing the put? It seems to me that we should also subtract the cost of the put here as well.

Any help would be appreciated.