Errata....
But I should note that jurisdiction might also be a factor.
[....]
I know that Canadian __loans__ rely on "semi-annual compounding" (a
misnomer, IMHO). I don't know if Canadian __savings__ accounts do. I
suspect not, since the calculator matches my formula, as I noted above.
GIGO! Since I asked the calculator to compound monthly, of course it
did. That proves nothing about the compounding frequency for the
"typical" Canadian savings account. On the other hand, the calculator
does not offer the option to do semi-annual compounding. That might
be indicative of Canadian options; or it simply might be indicative of
the calculator's designer knowledge.
http://www.dinkytown.net/java/CACompoundSavings.html
THAT ONE doesn't jive with Excel's results...Don't know why either.
[....] That calculator matches my result above
The calculator also matches (within $1) my computation when
compounding daily, namely either of the following:
=fv((1+12%/365)^(365/12)-1, 12*5, -100, -100000)
=fv(fv(12%/365,365/12,0,-1)-1, 12*5, -100, -100000)
Result: $190,373.63 (rounded). Calculator result: $190,373.
But that does not make it right(!). Because (my US) banks calculate
interest on the balance after closing, I believe the following are
more correct.
Monthly compounding (result: $189,918.31):
=fv(12%/12, 12*5, -100, -100000, 1)
Daily compounding (result: $190,455.82):
=fv((1+12%/365)^(365/12)-1, 12*5, -100, -100000, 1)
In either case (type=0 or type=1), my computation does not match the
calculator's results for the following cases. I am still trying to
figure out why not.
Quarterly compounding (calculator result: $188,752):
=fv(12%/4, 4*5, -100*12/4, -100000, 0) [$188,672.24]
=fv(12%/4, 4*5, -100*12,4, -100000, 1) [$188,914.07]
Annual compounding (calculator result: $184,268):
=fv(12%, 5, -100*12, -100000, 0) [$183,857.59]
=fv(12%, 5, -100*12, -100000, 1) [$184,772.40]
Nonetheless, the type=0 formulas come within 0.04% to 0.22% of the
calculator's results. "Close enough for government work" ;-). (Then
again, the differences increases with the number of years for the
investment.)
HTH. Again, if you post your parameters, we might be able to provide
a better explanation of any disparity.