Currency Forward Premium or Discount Calculation?

[dtrynoski]

Forward Rate: $1.60/1 pound
Spot: $1.75/1 pound
The exact forward premium/discount for the pound against the $ is 1.6-1.75/1.75 = -8.57% or a forward discount of -8.57% of the pound against the dollar.
Why is it then, that when you convert the rates to pound/$, the discount changes??
1/1.6 = .625 pound/1$ Forward Rate
1/1.75 = .57143 pound/1$ Spot Rate
Forward premium/discount calculation = .625 - .57143 / .57143 = - 9.374% discount
What causes the difference between these answers?

 

[cpk123]

since the operations are completely different
in the first case it is (a-b)/b
in the 2nd case => (1/a - 1/b) / (1/b) = ((b-a)/ab)/(1/b) = (b-a)/a