How to calculate Compound Interest in Excel - Formula with Examples 💻
Compound interest is defined as "the interest on savings calculated on both the initial principal and the accumulated interest from previous periods." Classically, known as "interest on interest", this is the most common type of interest used in everyday finance situations.
To calculate compound interest in Excel,
on principal amount P
at the rate of interest R
for the number of years N
and compounded T times per year
we can use the formula = P*(1+R/T)^(N*T)
In this video, understand how to calculate various kinds of compound interest values using Excel formulas.
⏱ Video Topics:
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0:00 - Compound Interest Calculations in Excel
0:40 - Compound Interest Formula
1:50 - Using the FV function to calculate compounded value
2:22 - Pop Quiz ⁉
2:40 - Compounding every quarter (or other durations)
4:52 - Understanding compounding effect (simple vs. compound interest over time)
6:34 - Effect of interest rates on the compounded value
7:57 - Compounding with regular payments (monthly for example)
10:26 - Reverse of compounding (using goal seek)
📁 Sample Workbook:
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Download the sample file and learn more about compound interest in Excel using this page 👇
https://chandoo.org/wp/compound-inter...
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