Explanation
If you have an annual interest rate, and a starting balance you could calculate interest with:
and the ending balance with:
So, for each period in the example, we use this formula copied down the table:
With the FV function
The FV function can also be used to calculate future value.
The equivalent formula is:
The interestrateis used as-is, since we are compounding annually,nperis 1, since there is only one period per year,pmtis zero, since there are no additional payments, andpvis the starting balance, input as a negative value by convention.
Related formulas
Calculate simple interest
Calculate compound interest
Related functions
FV Function
