Results 1 to 4 of 4
  1. #1
    3 Star Lounger
    Join Date
    Apr 2001
    Location
    Joliette, Quebec, Canada
    Posts
    290
    Thanks
    9
    Thanked 0 Times in 0 Posts

    average compond interest calculation (2000 SP3)

    I started off with $426 and six years later i have $652, how does one compute the annual rate of reture

  2. #2
    Plutonium Lounger
    Join Date
    Mar 2002
    Posts
    84,353
    Thanks
    0
    Thanked 29 Times in 29 Posts

    Re: average compond interest calculation (2000 SP3)

    Say the number of years (6) is in A1, the $426 is in A2 and the $652 is in A3. The following formula will calculate the interest rate:
    =RATE(A1,0,-A2,A3)
    (you must put a minus sign in front of either the third or fourth argument)

  3. #3
    3 Star Lounger
    Join Date
    Apr 2001
    Location
    Joliette, Quebec, Canada
    Posts
    290
    Thanks
    9
    Thanked 0 Times in 0 Posts

    Re: average compond interest calculation (2000 SP3)

    works great, but I fail to see the rational of the minus sign.

    Richard

  4. #4
    Plutonium Lounger
    Join Date
    Mar 2002
    Posts
    84,353
    Thanks
    0
    Thanked 29 Times in 29 Posts

    Re: average compond interest calculation (2000 SP3)

    Negative numbers represent amounts paid by you, positive numbers represent amounts received by you. From a financial viewpoint, you pay $426 (to the bank) and receive $652 back 6 years later. So the $426 must be negative. (Alternatively, you receive a loan of $426, and 6 years later pay back $652 = original amount plus compounded interest)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •