How to Calculate Compound Interest in Excel
Compound interest is the interest that is earned on both the initial principal and the accumulated interest. It is different from simple interest, which is calculated only on the initial principal. Compound interest is a powerful way to grow your money over time, as it allows you to earn interest on interest.
We will show you how to calculate compound interest in Excel using two methods: the FV function and the POWER function. Both functions can take into account the frequency of compounding, such as monthly, quarterly, or annually.