Compound Interest Formula in Excel

Excel compound interest formula

The easiest way to calculate compound interest in Excel is usually the FV function:

=FV(rate, nper, pmt, pv, type)

What the FV arguments mean

• rate = interest rate per period.
• nper = total number of periods.
• pmt = regular payment each period. Use 0 if there are no deposits.
• pv = present value, usually entered as a negative number.
• type = 0 for end-of-period payments, 1 for beginning-of-period payments.

Monthly compounding, no deposits

For £10,000 at 5% for 10 years compounded monthly:

=FV(5%/12, 10*12, 0, -10000, 0)

This returns approximately £16,470.09.

Monthly compounding with monthly deposits

For £10,000 starting amount plus £250 deposited at the end of each month:

=FV(5%/12, 10*12, -250, -10000, 0)

For deposits at the beginning of each month, change the final argument to 1:

=FV(5%/12, 10*12, -250, -10000, 1)

Daily compounding in Excel

For daily compounding, divide the annual rate by 365 and multiply the years by 365:

=FV(5%/365, 10*365, 0, -10000, 0)

Continuous compounding in Excel

For continuous compounding without deposits, use EXP:

=10000*EXP(5%*10)

Copy a formula from the calculator

The main calculator can generate an Excel formula from your current inputs. Enter your numbers, click calculate, then use the Copy Excel formula button.

Open the £10,000 Excel example