Excel 2010 Bible

Chapter 15: Creating Formulas for Financial Applications

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FIGURE 15.11

Using a series of formulas to calculate compound interest.

You can use the FV (Future Value) function to calculate the final investment amount without using

a series of formulas. Figure 15.12 shows a worksheet set up to calculate compound interest. Cell

B6 is an input cell that holds the number of compounding periods per year. For monthly com-

pounding, the value in B6 would be 12. For quarterly compounding, the value would be 4. For

daily compounding, the value would be 365. Cell B7 holds the term of the investment expressed

in years.

FIGURE 15.12

Using a single formula to calculate compound interest.