How to calculate compound interest in Excel To compute the compound interest in Excel for different time periods all you have to do is convert the formula above into a relatable formula in Excel. The general formula for compound interest is. Go to Number and from there under the category of Accounting.
The RATE function is configured as follows.
For daily compounding the interest rate will be divided by 365 and n will be multiplied by 365 assuming 365 days in a year. In case of lease the annual percentage rate is 11 550 2. Where the direction of cash flow is opposite the signs must be opposite too and vice versa. To get annual interest rate we multiply the monthly rate by 12.