Post by account_disabled on Mar 5, 2024 6:32:33 GMT
Investments are a capital issue for a company, but they have also begun to be part of the daily lives of many people on a more particular level . However, in order to get the most out of them, there are a series of factors that you must know, and the analysis is essential to determine if the operation will be profitable. However, to do this, there are certain tools that can help you, such as calculating the results from the formula for compound interest in Excel . Don't you know what it is or how to calculate it? We tell you everything below. CTA Post What is the composed interest? Compound interest is especially relevant when it comes to long-term investments , since it refers to interest that accumulates from previous returns. That is, it consists of the profits obtained from the interests that are added to the interests of the initial capital . For example, if you invest an amount that offers a return in a few months, compound interest is the gain that is generated in interest from that amount, which also grows exponentially in each period.
Short, in the same way that, when requesting a loan or signing a mortgage, you agree to pay the bank interest in exchange for obtaining capital in advance, with compound interest, you can generate benefits in the opposite sense , that is, You can obtain profitability from the interest previously generated. formula-compound-interest-excel How is compound interest calculated? Know the compound interest formula in Excel Before proceeding with the calculation of compound interest, there are a series of data that you should know. On the one hand, as is logical, you need to know the investment or initial capitalon Europe Mobile Number List the other hand, the annual interest rate that corresponds to this figure ( Ti ) and, finally, the period of time during which it will be maintained the investment . Once you have this data, to calculate compound interest, you must apply the following formula: Final capital t However, nowadays, there are tools like Excel that make it easier for you to calculate. Do you want to know how you can transfer the compound interest formula to Excel ? The truth is that it is a very simple operation in which it is enough to include each data in a cell.
First of all, you must add the initial capital - for example, let's say you indicate it in cell A1 -. Next, you must do the same with the annual interest , but in cell A2 and, finally, in cell A3 , the number of periods in which the compound interest will give you returns . To obtain the result of applying the compound interest formula in Excel, you just have to add the following formula in any other cell Do you still not understand very well how to do it? Let's take an example. Imagine that you make an initial investment of in which the annual interest is 5% , and you want to find out the return it will offer you, based on compound interest, in the next 10 years . The formula for compound interest without using Excel would be the following: Final capital .9 However, to obtain the result from the compound interest formula in Excel , you should include the data in each cell and apply the guidelines set out above. formula-compound-interest-excel Why it is important to know the compound interest formula in Excel Taking into account that there are organizations that base all or a large part of their profits on their investments, knowing how to apply mechanisms such as the compound interest formula in Excel to this process allows them to speed up decision-making .