![]() ![]() = the amount we will start with (also a negative number) = the amount of the payment (represented as a negative number) ![]() N = the number of periods you will make payments (2 years x 12 months) Rate = Interest Rate per compound period – in this case a monthly rate (6% per annum / 12 months) We can use the Excel FV function and it works like this: Excel FV Function =FV( rate, N,, , ) But if you’re a stickler for accuracy or you do this type of calculation in your work you’ll want to know the correct way to calculate the interest. It’s not as simple as =$10,000 x (1+.06 x 2)…although this will get you close. Excel for Customer Service ProfessionalsĮver had a spare $10,000 to put in a term deposit? If you did you might wonder what it would be worth at the end of 2 years at an interest rate of 6% compounded monthly. ![]()
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