The compound interest formula in Microsoft Excel is as follows:
A = P * (1 + r/n)^(nt)
where:
A = the future value of the investment
A = P * (1 + r/n)^(nt)
where:
A = the future value of the investment
P = the principal amount (the initial amount of money)
r = the annual interest rate (expressed as a decimal)
n = the number of times that interest is compounded per year
t = the time period (in years)
To calculate compound interest in Excel, you can use the formula above in a cell, or use the built-in financial functions such as =FV (future value) or =PMT (payment). Here's an example using the formula:
A = P * (1 + r/n)^(nt)
To calculate compound interest in Excel, you can use the formula above in a cell, or use the built-in financial functions such as =FV (future value) or =PMT (payment). Here's an example using the formula:
A = P * (1 + r/n)^(nt)
A = $1000 * (1 + 0.05/4)^(4*2)
A = $1000 * 1.0125^8
A = $1267.06
So the future value of the investment for a $1000 principal for 2 years at 5% interest rate compounded quarterly would be $1267.06.
So the future value of the investment for a $1000 principal for 2 years at 5% interest rate compounded quarterly would be $1267.06.
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