Compound Interest

[Robert]

Is there a formula that will calculate compound interest? Assuming 4%
interest each period, I can put the original dollar amount in cell A1, then
in cell B1 enter “=sum(A1*.04)+A1â€, then in cell C1, “=sum(B1*.04)+B1â€, etc.,
eventually arriving at the final answer but it takes up a lot of cells and is
pretty clunky.

 

[Sam Wilson]

=A1*(1.04)^n

where n is the number of years/periods you want

 

[Mike H]

Robert,

Maybe

=investment_ammount*(1+interest_rate)^investment_periods

so £1000 for 1 year @ 4%

=1000(1+.04)^1

Mike

Mike

 

[JLGWhiz]

If the 4% is per period then both Sam and Mike are on track. However, if the
4% is per year and your conversion period is less than or more than one year,
you result will be in error. The annual percentage rate must be converted to
a rate per period. For 4% per year with monthly conversion, .04/12 = .00333
per period and quarterly conversion .04/4 = .01 per period.