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Annual compound interest schedule in Excel

Annual compound interest schedule

To generate an annual COMPOUND interest schedule, it is easily done when you base your formula around starting balance of that schedule and the particular annual interest rate.

=start+(start*rate)

This a generic formula.

A more applied formula looks like this =C5+(C5*rate)

Explanation

Getting an annual compound interest schedule could help an organization. It could help a financial institution gets its numbers sorted out in a neat and smart manner. It is especially important when carrying out an annual audit.

Example

In this example, we will be using generic data to see how an annual compound interest rate could be calculated. You would see that getting it done is much easier than you thought it was.

Step 1

Here, enter all data in their appropriate cells correctly.

Figure 1. Excel showing parameters for calculating annual compound interest schedule.

Step 2

Select any cell on the spreadsheet and label it as “Annual Interest Rate”.

Figure 2. Creating a column for the annual interest rate.

Step 3

Apply the formula in cell E8 to get the Annual Compound Interest Rate. Your “rate” could be anything. You could make it any number. It all depends on the spreadsheet you are working on. Remember we are using generic data to carry out this calculation?

Figure 3. Excel generates an annual compound interest rate.

Notes on calculating Annual Compound Interest

  •        Should you have an annual interest rate, and a starting balance, there is another way to go about calculating the annual compound rate. Simply use the formula =balance *rate
  •        A common mistake with the use of this formula is that many always insert spaces between the entries. Doing that will only come out as an error.

 

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