RATE OF RETURN

[Steveandshelly]

I am trying to calculate the following

contribution £100pm
Term 360 months
assumed growth 4% per annum, applied daily

I cannot use the FV function as I don't know how to work out what
figure to put in the rate of return box to give me daily applied
interest.

Can you help

 

[Niek Otten]

If you want to apply interest daily, you need to supply dates instead of #
of months, because leap years matter.
You can find the daily interest rate with the EFFECT function.

If you base your calculation on a 30-day, 12-month year, you can use FV with
the rate found with EFFECT (for days) and NOMINAL (for months)

--
Kind regards,

Niek Otten

I am trying to calculate the following

contribution £100pm
Term 360 months
assumed growth 4% per annum, applied daily

I cannot use the FV function as I don't know how to work out what
figure to put in the rate of return box to give me daily applied
interest.

Can you help

 

[joeu2004]

I am trying to calculate the following
contribution £100pm
Term 360 months
assumed growth 4% per annum, applied daily
I cannot use the FV function as I don't know how to work
out what figure to put in the rate of return box to give me
daily applied interest.

In the US, it is customary for the daily rate to be 4%/365.
I do not know the customs of your country. Based on US
customs, the effective monthly rate would be:

=fv(4%/365, 365/12,, -1) - 1

Thus, the FV of the monthly annuity compounded daily
would be:

=fv(fv(4%/365, 365/12,, -1) - 1, 360, -100)