Page 348 - Excel 2007 Bible

21_044039 ch16.qxp 11/21/06 11:07 AM Page 305
Creating Formulas for Financial Applications
FIGURE 16.11
Using a series of formulas to calculate compound interest.

You can use the FV (Future Value) function to calculate the final investment amount without using a series 16
of formulas. Figure 16.12 shows a worksheet set up to calculate compound interest. Cell B6 is an input cell
that holds the number of compounding periods per year. For monthly compounding, the value in B6 would
be 12. For quarterly compounding, the value would be 4. For daily compounding, the value would be 365.
Cell B7 holds the term of the investment expressed in years.

FIGURE 16.12
Using a single formula to calculate compound interest.

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