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Anonymous
Anonymous asked in Business & FinanceInvesting · 1 decade ago

When constructing a spreadsheet for a compound interest formula do you start compounding on the first period?

If the rate was 8.4%pa compounded monthly and their are 36 periods (3 years) and the amount is $100,000 do you start compounding on the first month or the second month? eg.

period amount

0 100,000

1 100650

2

3

is this right

thanks

1 Answer

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  • zman492
    Lv 7
    1 decade ago
    Favorite Answer

    <<<is this right>>>

    If would be if the rate was 7.8% instead of 8.4%.

    7.8% / 12 = 0.65% per month = $650 after one month

    8.4% / 12 = 0.70% per month = $700 after one month

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