Effective rate of Interest and Copounding Interest

[Guest]

I need a function or formula that can calculate what the interest rate would
be for a number of years.

see

http://www.finaid.org/calculators/compoundinterest.phtml

for an example.

I need the formula they used to place into excel.

 

[N Harkawat]

=--TEXT((1+A1/12)^(A2*12)-1,"0.00%")
where A1 holds the yearly rate and A2 holds the number of years

 

[Guest]

Compound interest is a common item and is =PV*(1+R)^N

R is the rate for the period expressed in terms of N. If N is years then R
is the annual rate. If N is months it is the average monthly rate.

Example: I have an annual rate of 18% and I wish to compute for 9 months.
The R value would be .18/12 or .015 and the formula would be PV*(1+0.015)^9

Another form
=P+(P*EFFECT(EFFECT(k,m)*n,n))

http://support.microsoft.com/default.aspx?scid=kb;en-us;213907
http://support.microsoft.com/default.aspx?scid=kb;en-us;141695

Frank T

 

[Fred Smith]

The function which calculates the compound interest rate is =RATE.