Talk:Forward rate

[Untitled]

I believe that the formula is incorrect, the correct formula should be:

The n-year forward rate is given by: f(n;i) =( n'th root {[ (1+r(j))^j]/[(1+r(i))^i]})-1 with n= j-i

Follow up: Yes formally that would be the correct form. however, the formula in the article makes use of a very common approximation: when i is small (as is the case with interest rates), then (1+i)^n = 1 + i*n. Using this approxitation in the arbitrage equation one can derive the forward rate calculation formula as it appears in the article. — Preceding unsigned comment added by StatisticSammy (talk • contribs) 00:38, 9 March 2011 (UTC)

Simple interest

The whole point about simple interest is that it gets added (1+i1+i2) and NOT multiplied (1+i1)(1+i2), whatever time periods 1 and 2 represent. In any case, nobody in business actually uses simple interest, it's just a stepping stone towards compound interest for learners, so how about scrapping the whole section on simple interest.----Ehrenkater (talk) 17:55, 9 June 2016 (UTC)