Hi i need help to find a formular to work out compound intrest rates for a 12
mounth period on a dept owed to me any ideas will be greatfull
thanks for you time in advance

Hi,

If I get the definition of compound interest rate correct, then you
want to iteratively increase the debt by a set percentage each month
from the previous month's debt.

I can think of a number of solutions

1. results in a column 13 cells long

2. is a single cell that returns the result for month 12

the second requires a little more maths knowledge than the first to
understand how it works.

sol'n 1:
assuming initial value is in cell A1

in cell A2: =A1*(1+(<interest rate as a percentage*0.01))
then fill down another 11 cells.

the benefits of this solution is that it gives you how much is owed in
any required month (if for some reason the debt can be paid off before
the 12 month period is up), and the <interest rate can either be a
number, or a reference to another cell where you put that interest
rate. WARNING if referring to another cell remember to make it a static
reference by using $ (e.g. $C$3) otherwise fill down will not give you
the desired results!

If you are happy swapping between percentages and decimals you can
leave the interest rate as a decimal and leave out the "*0.01" bit

sol'n 2:
Assuming again original debt is in A1
in B1: = (A1*(1+(<interest rate as a percentage*0.01)))^<number of
months

again, bits in <brackets can either be numbers or references to other
cells.

SK




JAF wrote:
Hi i need help to find a formular to work out compound intrest rates for a 12
mounth period on a dept owed to me any ideas will be greatfull
thanks for you time in advance

WHOOPS

Brackets are wrong in solution 2:

it SHOULD be:
=A1*((1+(<interest rate*0.01))^<no. months)

Mea culpa

SK

Thanks great help just wot i wanted solution 1

"SK" wrote:

Hi,

If I get the definition of compound interest rate correct, then you
want to iteratively increase the debt by a set percentage each month
from the previous month's debt.

I can think of a number of solutions

1. results in a column 13 cells long

2. is a single cell that returns the result for month 12

the second requires a little more maths knowledge than the first to
understand how it works.

sol'n 1:
assuming initial value is in cell A1

in cell A2: =A1*(1+(<interest rate as a percentage*0.01))
then fill down another 11 cells.

the benefits of this solution is that it gives you how much is owed in
any required month (if for some reason the debt can be paid off before
the 12 month period is up), and the <interest rate can either be a
number, or a reference to another cell where you put that interest
rate. WARNING if referring to another cell remember to make it a static
reference by using $ (e.g. $C$3) otherwise fill down will not give you
the desired results!

If you are happy swapping between percentages and decimals you can
leave the interest rate as a decimal and leave out the "*0.01" bit

sol'n 2:
Assuming again original debt is in A1
in B1: = (A1*(1+(<interest rate as a percentage*0.01)))^<number of
months

again, bits in <brackets can either be numbers or references to other
cells.

SK




JAF wrote:
Hi i need help to find a formular to work out compound intrest rates for a 12
mounth period on a dept owed to me any ideas will be greatfull
thanks for you time in advance