To calculate compound interest in Excel, you can use the FV function. This example assumes that $1000 is invested for 10 years at an annual interest rate of 5%, compounded monthly. In the example shown, the formula in C10 is:
The FV function can calculate compound interest and return the future value of an investment. To configure the function, we need to provide a rate, the number of periods, the periodic payment, the present value.
To get the rate (which is the period rate) we use the annual rate / periods, or C6/C8.
To get the number of periods (nper) we use term * periods, or C7 * C8.
There is no periodic payment, so we use zero.
By convention, the present value (pv) is input as a negative value, since the $1000 "leaves your wallet" and goes to the bank during the term.
If you have an annual interest rate, and a starting balance you can calculate interest with: = balance * rate and the ending balance with: = balance + ( balance * rate ) So, for each period in the example, we use this formula copied down the table...
The FV function calculates compound interest and return the future value of an investment over a specified term. To configure the function, we need to provide a rate, the number of periods, the periodic payment, the present value: Present value ( pv...
The Excel FV function is a financial function that returns the future value of an investment. You can use the FV function to get the future value of an investment assuming periodic, constant payments with a constant interest rate.
Excel Formula Training
Formulas are the key to getting things done in Excel. In this accelerated training, you'll learn how to use formulas to manipulate text, work with dates and times, lookup values with VLOOKUP and INDEX & MATCH, count and sum with criteria, dynamically rank values, and create dynamic ranges. You'll also learn how to troubleshoot, trace errors, and fix problems. Instant access. See details here.