In this case C2 contains the value 10180 so the Excel worksheet will calculate 10180 x 108 and will display 10917. N is the number of investment periods for example 36 months 3 years etc. Step 1 We need to name cell E3 as Rate by selecting the cell and changing the name using Name Box.
You can follow this same logic to create the formula that calculates year 3 interest in cell E2 D2 x 108.
So Interest calculated over the inflated amount is called Compound interest. 60 monthly periods for a 5 year loan. In the example shown the formula in C10 is. The interest portion of a loan payment can be calculated manually by multiplying the periods interest rate by the remaining balance.