V P 1 r n n t. Create an Excel document to compute compound interest. So you know the formula and you know where to put the numbers.
After one year you will have 100 10 110 and after two years you will have 110 10 121.
Calculate the common ratio using the interest rate or the rate of return. V P 1 r n n t. You require the principal amount simple interest rate and the period of interest in months or years to calculate compound interest amount. In this exercise you get to see what happens when compound interest is working for you rather than against you.