Compound Interest Formula

[rajkenya1]

Hi Guys

I am trying to work out a formula for compound interest in the attached spreadsheet.

Basically as an example i want to invest $100,000 which earns interest of 9.5% annually but is compounded quarterly. Furthermore at the end of each quarter i top up $100 to the amount after the interest is earned.

So in words 100,000 earns interest of approximately $3167 (9.5%/12 x 4 to get quarterly rate) in the first quarter after which i add to the $103167 another 100 which is then invested again.

Appreciate your help

Have attached a sample spreadsheet layout but you can change it around if you feel to get my desired solution.

Thank you.

 

[bobhc]

Try this

http://www.excel-easy.com/examples/compound-interest.html


.

 

[rajkenya1]

Thanks Bob, i will check out the website you sent me.

Cheers

 

[Hui]

E3: =B3*C3/4+D3 copy down
B4: =B3+E3 copy down

This assumes each row is a quater
See attached file:

 

[rajkenya1]

Thank you Hui.

 

[Wag]

1. The FV function will automatically do exactly what you need.
2. Note that you have an error in your formula above. When you have quarterly compounding, you need to divide by the number of periods in a year which in your case is 4. So be sure to divide 9.5 by 4, not by 12 (9.5%/4).

--Wag--