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#1
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Compound Interest
I see the formula for calculating annually compounded interest. Is there a
function formula for daily compounding of interest? RickS |
#2
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Compound Interest
Try using the rate function and setting the nper = 360 or 365
(depending on how many days you want to use). On Jul 15, 1:00*pm, RickS wrote: I see the formula for calculating annually compounded interest. *Is there a function formula for daily compounding of interest? RickS |
#3
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Compound Interest
Thanks Tim, are you suggesting I do this with the NPER or PV formulas? But
where do I put the 360 basis, in the formula as described in Excel Help? Which component is the basis? NPER(rate, pmt, pv, fv, type) RickS -- Confused... "Tim879" wrote: Try using the rate function and setting the nper = 360 or 365 (depending on how many days you want to use). On Jul 15, 1:00 pm, RickS wrote: I see the formula for calculating annually compounded interest. Is there a function formula for daily compounding of interest? RickS |
#4
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Compound Interest
Rick
You need to use the annual rate divided by the number of periods. For example, with a 5% annual rate Annual: =FV(0.05,1,0,1000,1) Monthly: =FV(0.05/12,12,0,1000,1) Daily: =FV(0.05/365,365,0,1000,1) All the financial functions work the same general way. HTH, Bernie MS Excel MVP "RickS" wrote in message ... I see the formula for calculating annually compounded interest. Is there a function formula for daily compounding of interest? RickS |
#5
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Compound Interest
thank you very much for the clarification
-- RickS "Bernie Deitrick" wrote: Rick You need to use the annual rate divided by the number of periods. For example, with a 5% annual rate Annual: =FV(0.05,1,0,1000,1) Monthly: =FV(0.05/12,12,0,1000,1) Daily: =FV(0.05/365,365,0,1000,1) All the financial functions work the same general way. HTH, Bernie MS Excel MVP "RickS" wrote in message ... I see the formula for calculating annually compounded interest. Is there a function formula for daily compounding of interest? RickS |
#6
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Compound Interest
There are some instances were (1.05^(1/365)-1) is the correct interest rate to be used - it all depends if you are dealing wth nominal or effective interest rates. Granted that .05/365 is used in more cases than what I posted - but one needs to know which rate to use... -- Wag more, bark less "Bernie Deitrick" wrote: Rick You need to use the annual rate divided by the number of periods. For example, with a 5% annual rate Annual: =FV(0.05,1,0,1000,1) Monthly: =FV(0.05/12,12,0,1000,1) Daily: =FV(0.05/365,365,0,1000,1) All the financial functions work the same general way. HTH, Bernie MS Excel MVP "RickS" wrote in message ... I see the formula for calculating annually compounded interest. Is there a function formula for daily compounding of interest? RickS |
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