At your home town one of the merchants sells carrots for about 70 gold. Buy as many as you can carry but be sure to keep at least 200g (just to be safe). Stay at the inn for three days, then after that your carrots should have become moldy carrots and sell for almost 4x the price you paid for them.

Note; In the latest patch of the game, the developers have fixed this a little so that you can't carry a significant amount of carrots at one time. It's still a valid cheat, but it takes a while longer now that your supply has been reduced. There is now a set limit of 99.