Is there an exact forumla for working out compound interest over a set number of years?

Question

So I want to know the how much interest is compounded over ten years with an interest rate of maybe 4 percent whilst adding a montly amount. I would like to be able to change any of the figures. but know what the interest plus the principle is at the end of the set duration.

Other than running this in excel is there a formula that can be used?

If you can help that would be great.

Regards,

James

Answer 1

Yes there is... A = P(1+R)^n

P = Principal

R = Rate

^n = number of years.

Answer 2

There isn't quite enough to go on here. If varies depending on how frequently the interest is compounding:

Annually = P × (1 + r) = (annual compounding)

Quarterly = P (1 + r/4)^4 = (quarterly compounding)

Monthly = P (1 + r/12)^12 = (monthly compounding)

Weekley = P (1+ r/52)^52 = (weekly compounding)

Daily = P(1+r/365)^365 (daily compounding)

P = principal amount (initial investment)

r = annual interest rate (as a decimal)

Answer 3

P = M([1+(i/q)]nq-1)(q/i)

P = Principal

M = Payment amount

i = interest rate

q = # of payments per year

n = # of years

I usually make it easy on myself by using a business calculator that I've had since my finance class.

You can make it easy on yourself by using this online calculator.

http://pixelspotlight.com/money.php

It allows you to pop in principal and payments, as well as how often you'll be making payments and collecting interest.