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Thread: I am looking for a formula to calculate compound interest in Excel

  1. #1
    Join Date
    Jan 2012
    Posts
    41

    I am looking for a formula to calculate compound interest in Excel

    I would appreciate some help in locating a formula to calculate compound interest on an increasing principal. Can anyone please help.

  2. #2
    Join Date
    Aug 2011
    Posts
    565

    Re: I am looking for a formula to calculate compound interest in Excel

    If you add to the principal at a constant rate, and the interest rate doesn't change, then simple use the FV function. Otherwise, you need to use a step wise method, using a table of variable input to FV at every change in rate or principal addition. Or else follow the suggestions given in the below thread.
    How to Calculate Compound Interest

  3. #3
    Join Date
    Aug 2011
    Posts
    461

    Re: I am looking for a formula to calculate compound interest in Excel

    Hope this sample can help you out. The formula is * = End value of initial capital (1 + p) ^ n where p = interest rate (eg 0.05 for 5%) & n = term in years. There is also an Excel function: =-FV (p, n, 0, initial capital). However, this throws a negative result out from there - that's why the sign is used.

  4. #4
    Join Date
    Jul 2011
    Posts
    435

    Re: I am looking for a formula to calculate compound interest in Excel

    For this function ZW is recommended. It returns the future value of an investment at a constant rate and constant payments if necessary. A more detailed description of the function can be seen on the Office Excel Help website. For example, the formula = FV (3% / 12; xx, 0, -1000, 1) if interest is paid monthly at 3%, or = ZW (3% yy, 0, -1000, 1) at annual compounding. Xx or yy is for the period to be entered: the number of months for xx, yy the number of years that you are interested. 1000 is the investment that you have started.

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