# Thread: Function for compound interest

1. ## Function for compound interest

Does Excel have a built-in function for calculating compound interest.

Example: a 5-yr \$10,000 bond with a coupon rate of 2.55% with interest paid quarterly would return how much interest if held to maturity? I don't need the Present Value.

The formula is simple but I haven't found a built-in function which performs this calculation.

2. Have you looked at the IPMT, PMT, and PPMT in the financial category of functions?

3. I have attached a spreadsheet to compute the compound value of the bond using a mathematical calculation as well as the FV and then calculation the interest value

4. Maudibe: These functions all seem to apply to loans rather than bonds or annuities. Way back when I took Economics in college we were exposed to Present Value which takes into account the uncertainty of future payments.

HowardC: I agree with your method of calculation but I am still surprised that Excel doesn't have this as a direct entry function. An old DOS spreadsheet from Parsons Technology called ProCalc3D that I have has this function.

5. If you enter this formula =FV(B4,C5,0,-B1,1) into the spreadsheet that HowardC provided, you'll see that Excel does have a future value function. If you scroll the the financial functions you'll find dozens of formulas that deal with interest and payments.

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