Carry Trade Calculator - FX Interest Return

The carry trade calculator estimates interest carry, exchange-rate gain or loss, total profit, and return on capital for a currency carry trade. A carry trade borrows or funds in a lower-yielding currency and invests in a higher-yielding currency. The strategy can earn interest differential, but exchange-rate movement can quickly overwhelm the carry, especially when leverage is used. The formula is: total carry trade profit = position x (investment rate - funding rate) x days / 365 + position x FX price change; return on capital = profit / (position / leverage) x 100. The calculator separates interest carry from FX gain or loss so users can see whether profit comes from yield differential or currency movement. Leverage does not change dollar profit on the entered position, but it changes return on capital because less margin capital supports the same notional exposure. Use the calculator for FX scenario analysis, macro trade education, and risk checks before comparing broker quotes. It can show, for example, that a positive annual rate differential over 90 days may be erased by a small adverse currency move. It is also useful for stress testing leverage: higher leverage magnifies return on capital, but it also magnifies losses and liquidation risk. The estimate is simplified. It does not include bid/ask spreads, rollover conventions, day-count differences, broker financing spreads, margin calls, taxes, compounding, or path-dependent exchange-rate movement. For live trading, compare the output with broker swap rates and risk limits, and model adverse FX moves as carefully as favorable carry. For best results, keep all inputs on the same time basis and currency basis, then save the assumptions beside the output. That practice makes the estimate easier to audit later and prevents a common spreadsheet error: mixing monthly values with annual values or combining before-tax and after-tax figures. Re-run the scenario with conservative and optimistic assumptions before using the result in a budget, filing decision, trade review, or transaction memo.