How to compute compound interest in excel

This query is : Resolved

Report Abuse Follow Query Ask a Query

KAPIL

KAPIL (Querist)
Follow

27 October 2010 Can anyone proide me a sheet of compounding interest in excel via email: kapilbhatia2004@yahoo.co.in

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

29 October 2010 How do you want to compound?
Daily? Monthly?

KAPIL

KAPIL (Querist)
Follow

30 October 2010 both

Upgrade to CAclubindia Pro. Subscribe Now!

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

01 November 2010 Step 1
Get the annual rate. Let us say 12%

Step 2
If monthly compounding, then get monthly rate which is 12/12 = 1% or 0.01
If it is daily compouding then get the daily rate which is 12/365 =0.03287% or .003287

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

01 November 2010 Step 3
Add 1 to the above
Monthly - 1.01
Daily - 1.003287

Step 4
What period?
Let us say 3 months for monthly commpounding
Let us say 15 days for daily compounded

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
Follow

01 November 2010 Final Step
On a principal amount of 200, the maturing amount will be

for monthly 200 X (1.01)^3

for daily 200 X (1.003287)^15

^ is a function in Excel (raised to)

Hope this is clear, if not pls revert