reverse principle calculation

[Demi]

Is there a way to enter a formula to calculate what the original
principle amount is if I know the other variables?

Date Invoice 1/1/04
Date of Period 1/1/05 '366 days
Interest Rate 18%/Year

1/1/05 balance of Principle +Interest 1000.00

What is the original principle and formula to calculate????

-Demi

 

[Duke Carey]

It depends on how the interest is calculated. If it is simple interest, then
it is

=1000/(1+.18) (assumes one year)

If the interest compounds (assume monthly here), then you use

=1000/( (1+i/12)^12 )

 

[Peo Sjoblom]

Another way

=PV(18%,1,,-1000)

for simple interest

and

=PV(18%/12,12,,-1000)

for compounded monthly


--

Regards,

Peo Sjoblom

http://nwexcelsolutions.com

 

[Demi]

Thank you the PV formula worked like a champ, since it was simple
interest compounded monthly I was able to use this to calculate the
first date- lastdate etc. thanks