• Microsoft Office
  • Microsoft Windows
  • Other Software
    • Microsoft Visual
    • Microsoft Project
    • Microsoft Visio
  • Anti Virus
  • Blog
    • Word
    • Excel
    • Powerpoint
    • Software tricks/tips
  • POLICIES
    • PAYMENT GUIDE
    • SHIPPING POLICY
    • REFUND POLICY
    • TERMS & CONDITIONS
    • Contact Us

No products in the cart.

  • Microsoft Office
  • Microsoft Windows
  • Other Software
    • Microsoft Visual
    • Microsoft Project
    • Microsoft Visio
  • Anti Virus
  • Blog
    • Word
    • Excel
    • Powerpoint
    • Software tricks/tips
  • POLICIES
    • PAYMENT GUIDE
    • SHIPPING POLICY
    • REFUND POLICY
    • TERMS & CONDITIONS
    • Contact Us

No products in the cart.

  • Microsoft Office
  • Microsoft Windows
  • Other Software
    • Microsoft Visual
    • Microsoft Project
    • Microsoft Visio
  • Anti Virus
  • Blog
    • Word
    • Excel
    • Powerpoint
    • Software tricks/tips
  • POLICIES
    • PAYMENT GUIDE
    • SHIPPING POLICY
    • REFUND POLICY
    • TERMS & CONDITIONS
    • Contact Us

No products in the cart.

  • Microsoft Office
  • Microsoft Windows
  • Other Software
    • Microsoft Visual
    • Microsoft Project
    • Microsoft Visio
  • Anti Virus
  • Blog
    • Word
    • Excel
    • Powerpoint
    • Software tricks/tips
  • POLICIES
    • PAYMENT GUIDE
    • SHIPPING POLICY
    • REFUND POLICY
    • TERMS & CONDITIONS
    • Contact Us
Excel

Calculate Compound Interest in Excel: A Step-by-Step Guide

0 Comments

Compound interest is a crucial financial calculation that is commonly used, and it’s important to know how to calculate it in Excel. Understanding the concept of compound interest is the first step before performing the calculation.

Compound interest refers to the interest calculated not only on the initial principal amount but also on the accumulated interest from previous periods of a deposit or loan.

In Excel, calculating compound interest is straightforward. You just need to use a specific calculation method and specify the time period for which you want to calculate.Compound Interest in Excel 1

In this post, we will explore how to calculate compound interest in Excel for different time periods. Let’s dive in.

Yearly Compound Interest in Excel Formula

To calculate yearly compound interest, you add the interest earned in one year to the principal amount for the next year. The formula in Excel for yearly compound interest is:

=Principal Amount * ((1 + Annual Interest Rate/1) ^ (Total Years of Investment * 1))Compound Interest in Excel 2

For example, with a principal amount of $10,000, an annual interest rate of 10%, and a 5-year investment, you will have $16,105. The calculation proceeds as follows: in the first year, you earn $10,000 * 10% = $1,000, and in the second year, ($10,000 + $1,000) * 10% = $1,100, and so on.

Quarterly Compound Interest Formula

Calculating quarterly compound interest follows a similar approach as yearly compound interest. However, you calculate the interest four times a year, and each quarter’s interest amount is added to the principal for the next quarter. The formula for quarterly compound interest in Excel is:

=Principal Amount * ((1 + Annual Interest Rate/4) ^ (Total Years of Investment * 4))Compound Interest in Excel 3

For instance, with a principal amount of $10,000, an annual interest rate of 10%, and a 5-year investment, you will have $16,386. The calculation proceeds as follows: in the first quarter, you earn $10,000 * (10%/4) = $250, and in the second quarter, ($10,000 + $250) * (10%/4) = $256, and so on for 20 quarters (5 years).

Monthly Compound Interest Formula

Calculating monthly compound interest follows the same basis as the other time periods. You calculate the interest at the end of each month, and the interest rate is divided by 12 to obtain the monthly interest rate. The formula for monthly compound interest in Excel is:

=Principal Amount * ((1 + Annual Interest Rate/12) ^ (Total Years of Investment * 12))Compound Interest in Excel 4

For example, with a principal amount of $10,000, an annual interest rate of 10%, and a 5-year investment, you will have $16,453. The calculation proceeds as follows: in the first month, you earn $10,000 * (10%/12) = $83.33, and in the second month, ($10,000 + $83.33) * (10%/12) = $84.02, and so on for 60 months (5 years).

Daily Compound Interest in Excel Formula

To calculate daily compound interest, you use the same approach as above, but the interest rate is divided by 365 to obtain the daily interest rate. The formula for daily compound interest in Excel is:

=Principal Amount * ((1 + Annual Interest Rate/365) ^ (Total Years of Investment * 365))Compound Interest in Excel 5

For instance, with a principal amount of $10,000, an annual interest rate of 10%, and a 5-year investment, you will have $16,486. The calculation proceeds

Rate this post
30
254 Views
How to Find the Average of the Highest 5 Values in ExcelPrevHow to Find the Average of the Highest 5 Values in ExcelMay 20, 2023
Finding the Lowest Value in a List of Numbers (N)May 20, 2023Finding the Lowest Value in a List of Numbers (N)Next

Leave a Reply Cancel reply

You must be logged in to post a comment.

Buy Windows 11 Professional MS Products CD Key
Buy Office 2021 Professional Plus Key Global For 5 PC
Top rated products
  • Windows 11 Home Key Global 2021 Windows 11 Home Key Global 2021
    Rated 5.00 out of 5
    $6.00
  • Windows Server 2022 Remote Desktop Services User Connections (50) Cal Key Global Windows Server 2022 Remote Desktop Services User Connections (50) Cal Key Global
    Rated 5.00 out of 5
    $22.00
  • AVG Ultimate 2021 with Antivirus + Cleaner, Secure VPN 10 Devices 2 Years AVG Ultimate 2021 with Antivirus + Cleaner, Secure VPN 10 Devices 2 Years
    Rated 5.00 out of 5
    $47.00
  • Avast Premium Security 2021 10 Devices 1 Year Global Avast Premium Security 2021 10 Devices 1 Year Global
    Rated 5.00 out of 5
    $28.00
  • Avast Ultimate Suite 2021 3 Years 10 Devices Global Avast Ultimate Suite 2021 3 Years 10 Devices Global
    Rated 5.00 out of 5
    $90.00
Products
  • Microsoft Office Professional Plus 2010 retail Microsoft Office Professional Plus 2010 retail Key Global - 5 PC
    Rated 4.96 out of 5
    $15.00
  • Windows Server2008 R2 Remote Desktop Services user connections (20)cal Windows Server2008 R2 Remote Desktop Services user connections (20)cal $29.00
  • AVG Internet Security 2021 10 Devices 1 Year Global AVG Internet Security 2021 10 Devices 1 Year Global
    Rated 5.00 out of 5
    $30.00
  • Windows Server 2016 Standard Key Global Windows Server 2016 Standard Key Global
    Rated 4.80 out of 5
    $10.00
  • Windows 11 Pro Key Global Windows 11 Pro Key Global
    Rated 5.00 out of 5
    $6.00
  • Microsoft Office Professional Plus 2013 retail CD Key Global Microsoft Office Professional Plus 2013 retail CD Key Global
    Rated 4.97 out of 5
    $11.00
  • Kaspersky Premium - 1 Device 1 Year - GLOBAL Kaspersky Premium - 1 Device 1 Year - GLOBAL $37.00
  • Microsoft Visual Studio 2022 Professional Key Microsoft Visual Studio 2022 Professional Key $19.00
  • Office 2024 Home And Business For Mac/Pc Bind Office 2024 Home And Business For Mac/Pc Bind $99.00
  • Microsoft Project Standard 2019 - 1 PC Microsoft Project Standard 2019 - 1 PC $12.00
Product categories
  • Anti Virus
  • Microsoft Office
  • Microsoft Project
  • Microsoft Visio
  • Microsoft Visual
  • Microsoft Windows
  • Other Software
  • Uncategorized

Buffcom.net always brings the best digital products and services to you. Specializing in Office Software and online marketing services

BIG SALE 50% IN MAY

Microsoft Office
Microsoft Windows
Anti-Virus
Contact Us

Visit Us:

125 Division St, New York, NY 10002, USA

Mail Us:

buffcom.net@gmail.com

TERMS & CONDITIONS | PAYMENT GUIDE  | SHIPPING POLICY  | REFUND POLICY

Copyright © 2019 buffcom.net  All Rights Reserved.