How to calculate Compound Interest

[Nikhil]

Hi,

Can any one let me know how to calculate compound interest in excel using
formula for function.

Thanks in Advance

 

[Jim Aksel]

See if any of the following functions are helpful:
INTRATE
IRR
MIRR
RATE
YIELD
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Jim

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[Bernard Liengme]

Invest P for n years at R% per year

beginning of year 1 you have P, so end of Year 1 you have: P+RP or P(1+R)
beginning of year 2 you have P(1+R); end of year 2 you have P(1+R)(1+R) or
P(1+R)^2
beginning of year 3 you have P(1+R)^2; end of year 3 you have P(1+R)^2*(1+R)
=
P(1+R)^3
.......
by the mathematical method called induction: by end of year n you have
P(1+R)^n

In Excel
A1 holds P
A2 holds R
A3 holds n
Value at then of year =A1*(1+A2)^A3
Interest accumulated =A1*(1+A2)^A3 -A1
best wishes

 

[Nikhil]

Thanks you very much Bernard

Invest P for n years at R% per year

beginning of year 1 you have P, so end of Year 1 you have: P+RP or P(1+R)
beginning of year 2 you have P(1+R); end of year 2 you have P(1+R)(1+R) or
P(1+R)^2
beginning of year 3 you have P(1+R)^2; end of year 3 you have P(1+R)^2*(1+R)
=
P(1+R)^3
.......
by the mathematical method called induction: by end of year n you have
P(1+R)^n

In Excel
A1 holds P
A2 holds R
A3 holds n
Value at then of year =A1*(1+A2)^A3
Interest accumulated =A1*(1+A2)^A3 -A1
best wishes
--
Bernard V Liengme
Microsoft Excel MVP
www.stfx.ca/people/bliengme
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