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Use compound interest formula on excel for compounding more than once a year to find accumulated balance after?
to find the accumulated balance after stated period. $400 deposit at an APR of 3% with quarterly compounding for 3 years. I started by using formula PV*(1+R)^N
PV=present value, R=rate, N= # of investment periods. 400*(1+3%)^12 (quarterly compounding=4 for 3 years= 4 * 3 = 12)..My answer came to $439.01 which is incorrect. Please help me. You have to use Excel...
Yes, I have the formula. I need to know how to enter into Excel. I tried A2*(1+B2/C2)^(C2*D2) How am I going to get rid of the punctuation?
1 Answer
- Ed ILv 710 years agoFavorite Answer
The formula for compound interest is A = P(1 + r/n)^(nt), where P is the principal, r is the rate as a decimal, t is the no of years, and n is the number of compoundings annually.
In this case, A = 400(1 + 0.03/4)^(3 • 4) = 437.5227591... ≈ $437.52
