The formula uses cell references to calculate the future value of 100 invested for 5 years with interest paid annually at rate of 4. Compound Interest Formulas and Calculations. The compound interest formula solves for the future value of the investment after set number of years.
The Excel compound interest formula in cell B4 of the above spreadsheet on the right uses references to the values stored in cells B1 B2 and B3 to perform the same compound interest calculation.
In the formula A represents the final amount in the account after t years compounded n times at interest rate r with starting amount p. P the principal investment amount the initial deposit or loan amount r the annual interest rate decimal n the number of times that interest is compounded per unit t. To calculate the quarterly compound interest you can use the below-mentioned formula. In this example add 1 to 00101 to get 10101.