Using the same information above enter Principal. Compound interest or interest on interest is calculated with the compound interest formula. Compound interest is the addition of interest to the principal sum of a loan or deposit or in other words interest on interest.
How to calculate compound interest in Excel.
Simple interest is the interest generated only from the principal. A P 1 r n nt A the amount of money accumulated after n years including interest P the principal amount your initial deposit or your initial. Compound interest includes the interest generated on the principal and the accumulated interest from any previous period. How to calculate compound interest in Excel.