Financial Functions

Excel Financial Functions perform many of the common financial calculations, such as the calculation of yield, interest rates, duration, valuation and depreciation.

How to calculate annual compound interest schedule in Excel

To calculate annual compound interest, you can use a formula based on the starting balance and annual interest rate. Formula =start+(start*rate) Explanation In the example shown, the formula in C6 is: =C5+(C5*rate) Note: “rate” is the named range F6. How this formula works If you have an annual interest rate, and a starting balance you… read more »

How to calculate annuity for interest rate in excel

An annuity is a series of equal cash flows, spaced equally in time.  To solve for an annuity interest rate, you can use the RATE function. Case study:  The goal in this example is to have $100,000 at the end of 10 years, with an annual payment of $7,500 made at the end of each year…. read more »

Bond valuation example in Excel

This tutorial show how to calculate the value of a bond on the issue date using the PV function. Explanation In the example shown, the formula in C10 is: =-PV(C6/C8,C7*C8,C5/C8*C4,C4) Note: This example assumes that today is the issue date, so the next payment will occur in exactly six months. See note below on finding the… read more »

Compound Annual Growth Rate CAGR formula examples in Excel

To calculate Compound Annual Growth Rate (CAGR) in Excel, the average rate of return for an investment over a period of time, you can use several approaches. Formula =(end/start)^(1/periods)-1 Note that unlike most other financial functions in Excel, future value (FV) does not need to be entered as a negative number. Explanation In the example… read more »

How to calculate compound interest in Excel

To calculate compound interest in Excel, you can use the FV function. Case study: This example assumes that $1000 is invested for 10 years at an annual interest rate of 5%, compounded monthly. Formula =FV(rate,nper,pmt,pv) Explanation In the example shown, the formula in C10 is: =FV(C6/C8,C7*C8,0,-C5) How this formula works The FV function can calculate compound… read more »

Calculate cumulative loan interest in Excel

To calculate the cumulative principal paid between any two loan payments, you can use the CUMIPMT function. In the example shown, we calculate the total principal paid over the full term of the loan by using the first and last period. Formula =CUMIPMT(rate,nper,pv,start,end,type) Explanation The formula in C10 is: =CUMIPMT(C6/12,C8,C5,1,60,0) How this formula works For this example,… read more »

Calculate cumulative loan principal payments in Excel

To calculate the cumulative principal paid between any two loan payments, you can use the CUMPRINC function. Formula =CUMPRINC(rate,nper,pv,start,end,type) Explanation In the example shown, we calculate the total principal paid over the full term of the loan by using the first and last period. The formula in C10 is: =CUMPRINC(C6/12,C8,C5,1,60,0) How this formula works For this example,… read more »

Calculate interest for given period in Excel

To calculate the interest portion of a loan payment in a given period, you can use the IPMT function. Formula =IPMT(rate,period,periods,-loan) Explanation In the example shown, the formula in C10 is: =IPMT(C6/12,1,C8,-C5) How this formula works For this example, we want to calculate the interest portion for payment 1 of a 5-year loan of $5,000… read more »

Calculate interest rate for loan in Excel

To calculate the periodic interest rate for a loan, given the loan amount, the number of payment periods, and the payment amount, you can use the RATE function. Formula =RATE(periods,payment,-amount)*12 Explanation In the example shown, the formula in C10 is: =RATE(C7,C6,-C5)*12 Loans have four primary components: the amount, the interest rate, the number of periodic… read more »

Calculate loan interest in given year in Excel

To calculate the total interest for a loan in a given year, you can use the CUMIPMT function. Formula =CUMIPMT(rate,nper,pv,start,end,type) Explanation In the example shown, the total interest paid in year 1 is calculated by using 1 for start period and 12 for end period. The The formula in F5 is: =CUMIPMT(5%/12,60,30000,1,12,0) Note: values hardcoded for readability only…. read more »

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