How to Calculate Compound Interest in Excel: Explained in One Minute!

Trasnscript:

I’m going to explain compound interest in one minute. If you invest two hundred dollars in 2025 at a five percent yield, your return will be ten dollars which will make your new total two hundred and ten dollars. Use control or command to select the cells in your formula. Type equals [=] then your formula inside parentheses [()] inside the cell your are trying to solve for. For your total this will be equals, parentheses, control-click your investment, control-click your return, parentheses [=(cntrl-investment cell + cntrl-return cell)]. [In] the cell for your new investment you want to do equals [=] then control-click your previous total. Then you drag those cells down to replicate your formula across multiple rows to see that you nearly tripled your investment in twenty years.

Notes:

If you want to stay out of debt and make more money, you need to understand compound interest. If you only pay the interest on a $200 loan with a five percent interest rate over twenty years, it will be the inverse of the above scenario: you will lose over three hundred and fifty dollars and still owe the original five hundred dollars. But if you invest two hundred dollars and average a five percent return over twenty years, you will make over three hundred and fifty dollars and still own the original five hundred dollars. Owe or own. It’s your choice.