All of we are aware about the magic of compound interest calculations. Compound interesting can grow your money like anything. But, how you calculate the compound interest with a given percentage of yearly returns? Here is a simple formula that will help you to do the task easily.
This formula is helpful to identify the final value. Also it is helpful to find out the total amount you are paying as the principal amount and interest for a loan. This is an excellent formula to calculate the maturity value of lump sum investments, like bank fixed deposits, which has a fixed interest rate and fixed period.Suppose you are investing $200,000 for 6 years in a compounding interest rate of 10% per year the calculation will be like this:
The original formula is =Amount investing(1+Interest%)^years
The total amount you are going to receive at the end of 6th year will be $354,312.20/-This is very helpful to calculate the investment for a period of time with fixed interest rate on compounding basis. You can use an MS Excel sheet to do this calculation.Comment if you feel this is useful to you.