Compound Interest Formula Excel: Functions And Formulas

Compound Interest Formula Excel: Functions And Formulas The compound interest formula excel is originally a compound interest formula turned calculator in a spreadsheet via a program. The program is known to give us the best and complex loan calculators today. It is called the MS Excel. The compound interest formula excel is just a standard name, for all the efficient calculators we can make using the program. The compound interest formula excel is made using formulas and functions in the Excel program. Such functions are known to be as PMT, PPMT, FV, and IPMT. With these functions, one will be able to make calculators regarding compound interest. It is also used for loan computations. Some even use compound interest formula excel calculators to calculate their profits in investments that are regarding savings with the principle of compounding interest. There are still a whole lot of other functions that one can use with the Excel in making compound interest formula excel calculators. However, one should know first how one function works and the formula to be used in situations for both loan and investment.

The compound interest formula excel made to a standard calculator for loan or investment has inputs needed. 

The first input needed is the cash amount of your deposit or loan.  The next one is the rate of interest.  The third one is the number of periods wherein the interest gets compounded.  The fourth one is the saved amount or the payments you have already made.  Lastly, the number of period that you are currently in. For example, you put five in the periods input. Every year the interest gets compounded. The second compounding had just happened. Then, you shall enter the value ‘2’ in the calculator.

What Are The Formulas And Functions Used In Getting Certain Elements In The Compound Interest Formula Excel Calculator? 1. The formula for the compound interest itself based from the inputs: Amount*((1 + InterestRate)^Periods) 2. The formula for repaying off a loan: (InterestRate*100*Amount((1 + InterestRate)^Periods))/(100*(((1+InterestRate)^Periods)-1))

3. The function for repaying off a loan: PMT(InterestRate,Periods,Amount) 4. The function for the total amount of Principal based on the current period the loan or investment is in: PPMT(InterestRate,CurrentPeriod,Periods,Amount) 5. The function for the current total interest of the loan or investment: IPMT(InterestRate,CurrentPeriod,Periods,Amount) 6. The function for the total amount of savings or payment without compounding interest: FV(InterestRate,Periods,Monthly/YearlySavedorPaidAmount) 7. The formula for the remaining balance or remaining profit to be earned based on the current period that is given: (Amount*((1 + InterestRate)^CurrentPeriod)) – ((-RegularLoanRepayment/InterestRate)*(((1 + InterestRate)^CurrentPeriod)-1))

The given functions and formula for the compound interest formula excel has a constant interest rate. However, it is not well practiced today. There are some savings accounts or loan that changes their rates. Therefore, one would need to split calculations in the compound interest formula excel for every change in the rate of interest. Fortunately, there are compound interest formula excel calculators that can be used for free online or are downloadable for the convenience of everyone! More of compound interest formula excel and compound interest formula, visit William Ava’s Blog Site click here.