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what is the formula for computing compound interest. Using the compound interest formula calculate principal plus interest or principal or rate or time. Multiply the number of years by the interest rate.
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To see the bigger impact of compound interest compute interest for later years. Compound interest is the addition of interest to the principal sum of a loan or deposit or in other words interest on interest. Interest principal rate term So using cell references we have.
The Rule of 72 is another way to make estimates about compound interest quickly.
C5 C7 C6 1000 10 005 500 Annual compound interest schedule. Compound interest is really mathematically interesting. The formula for compound interest is P 1 rnnt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded. If the interest on your investment is paid monthly while being quoted as an annual interest rate the Excel compound interest formula becomes.
