jim lee Posted September 16, 2006 Share Posted September 16, 2006 Hello everyone, I'm trying to model a savings account. Two tables, Accounts and their related transactions. The sum of the transaction amounts give the account balance. Simple enough.. But how to calculate a compounded interest? My thought was to add an interest transaction each time something changed either the interest rate or the addition of a transaction. But I can't find a formula for calculating compunded interest. I have Interest rate The startting balance The amount of time All the functions I see have you putting in payments. This is just one lump sum over time. Many thanks in advance! -jim lee Link to comment Share on other sites More sharing options...
comment Posted September 16, 2006 Share Posted September 16, 2006 There are two ways to compound interest: periodically and continuously. The future value of a deposit with periodically compounded interest is: principal * ( 1 + rate )^nper where rate is the interest rate PER COMPOUNDING PERIOD, and nper is the number of compounding periods. The future value of a deposit with continuously compounded interest is: principal * Exp ( rate * nper ) where rate is the interest rate per any arbitrary period, and nper is the number of those periods. Link to comment Share on other sites More sharing options...
jim lee Posted September 17, 2006 Author Share Posted September 17, 2006 Thank you! That was -exactly- what I was looking for. -jim lee Link to comment Share on other sites More sharing options...
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