Excel help please

[leosayer]

Enough of Excel help functions, time to ask the PH collective!

What is the formula for back calculating monthly compound interest?

As an example, I need to know the monthly value of a 10,000 investment that grows to 10,350 over 12 months. The interest rate is constant and is accrued once a month.

Obviously it's 3.5% for the year, but I need to produce a monthly value, and it isn't as simple as 3.5/12.

[shocker-z]

I sat down and thought this is SIMPLE! and then stud up and sat back down and thought it again after abnout my 5th attept at finding the solution i decided to google for it and this site shoiw's the calculation

www.alphainvestmentopportunities.com/cgi-bin/finance101article.cgi?article=InterestRatesandCompounding


not sure how you would inpliment that in excel but there you go



Liam

[Popolou]

A simple formula for the calculation of interest on a capital value is (1+i)^n (raised to the power of n, btw). This is caluclated on an annual basis where 'i' is the decimal form of the percentage.

I suppose you can try and work out the monthly values from this.

Regards

Popolou

[leosayer]

After further searching, I found the formula in Excel:

=NOMINAL(3.5%,12)/12

This gives you the monthly interest rate that will make up a yearly interest rate of 3.5%

Thanks