Linear Interpolation

I find the linear interpolation rule used in the schweser material different than the normal linear interpolation rule I use, can anyone explain for me the difference?

Liner Interpolation equation used in the CFA material=Interpolated rate = rate for lower bound + (# of years for interpolated rate – # of years for lower bound)(higher bound rate – lower bound rate)/(# of years for upper bound – # of years for lower bound)

the normal Lineral Interpolation equation=(# of years for upper bound-# of years for interpolated rate )*rate of lower bound+(# of years for interpolated rate-# of years for lower bound)* rate of upper bound/# of years for lower bound

A little algebra would show that they are equivalent expressions.

can you help me with deriving it?

CFAI will come up with far worthier questions for you than deriving formulas for linear interpolation.

LowRate + (InterpolationPoint - LowPoint) / (HighPoint - LowPoint) * (HighRate-LowRate)

is the easiest way to think about Linear Interpolation.


and that is the CFA formula. Going about it any other way is more complicated.