Estimate profit from borrowing a low-rate currency to hold a high-rate one.
Please do not make financial decisions based on these results.
What is the Carry Trade Calculator?
Estimate profit from borrowing a low-rate currency to hold a high-rate one. To use the Carry Trade Calculator, enter amount borrowed, funding rate, investment rate, currency change over year; it returns net profit, interest differential, and shows them instantly as you type.
Where the Carry Trade Calculator fits
Estimate profit from borrowing a low-rate currency to hold a high-rate one. The main figure it returns is the Net profit, worked out from the values you enter.
It belongs with the other macroeconomics tools. If you are comparing options or checking a result from another angle, try the Fisher Effect Calculator, Natural Rate of Unemployment Calculator or the Okun’s Law Calculator.
How to use the Carry Trade Calculator
- Enter your numbers. The inputs are Amount borrowed ($), Funding rate (%), Investment rate (%), Currency change over year (%). Use real figures from your own records where you can. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Net profit, and the cards below show Interest differential. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Carry Trade Calculator using the default values shown in the calculator above:
Inputs
| Amount borrowed ($) | 100,000 |
|---|---|
| Funding rate (%) | 0.5 |
| Investment rate (%) | 5.5 |
| Currency change over year (%) | -2 |
Results
| Net profit | $2,890.00 |
|---|---|
| Interest differential | 5% |
With these inputs the calculator returns Net profit: $2,890.00. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Amount borrowed ($) from 100,000 to 120,000 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Net profit | $2,890.00 | $3,468.00 | +20% |
| Interest differential | 5% | 5% | 0% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Carry Trade Calculator reports Net profit and interest differential. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
What is the main risk?
The high-yield currency can fall against the funding currency and wipe out the interest gain.
What is the difference between nominal and real GDP?
Nominal GDP uses current prices; real GDP removes price changes using a deflator so output can be compared over time.
What is the spending multiplier?
It is 1 divided by one minus the marginal propensity to consume, so an MPC of 0.8 gives a multiplier of 5.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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