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  1. #1
    3 Star Lounger
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    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. #2
    Gold Lounger Maudibe's Avatar
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    Have you looked at the IPMT, PMT, and PPMT in the financial category of functions?

  3. #3
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    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
    Attached Files Attached Files
    Last edited by HowardC; 2015-10-08 at 23:56.

  4. #4
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    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. #5
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    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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