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What is the reverse compound interest rate formula?
How does the compound interest rate calculator work?
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What is a reverse interest calculator?
3 days ago · The principal amount can be calculated using the reverse interest formula: \ [ P = \frac {A} { (1 + r)^n} \] where: \ (P\) is the principal amount ($), \ (A\) is the accumulated amount ($), \ (r\) is the interest rate per period (expressed as a decimal), \ (n\) is the number of periods.
- What Is Compound Interest?
- Compound Interest Rate Formula
- Reverse Compound Interest Rate Formula
- Create A Reverse Compound Interest Rate Calculator
- Application of The Reverse Compound Interest Rate Calculator
- Conclusion
- Related Articles
Compound Interest is a type of interest that is calculated from the initial amount of money and the collective interest from the past compounding periods. The compound interest is often treated as interest on interest. This compound interest thrives faster than simple interest. Because the simple interest is calculated only from the initial amount ...
The generic formula for calculating the compound interest is, If, P = Initial Amount (Principal) i = Annual Interest Rate in Percentage n = Period in Years Then the compound interest formulabecomes,
When you have, IA = Initial Amount FA = Final Amount n = Period in Years Then you can use the following formula to calculate the compound interest rate in reverse,
1. Use the POWER Function to Create a Reverse Compound Interest Rate Calculator
Now we know the formula to calculate the compound interest rate in reverse is, Where, IA =Initial Amount FA =Final Amount n =Period in Years To create a calculator that calculates the compound interest rate in reverse using the POWER function, ❶ Allocate cells to input the Initial Amount, Final Amount, Period in Years, etc. I have chosen cells D4, D5, and D6respectively. ❷ Now select a cell where you want to return the compound interest rate value and insert the following formula: ❸ After tha...
2. Use the RATE Function to Create a Reverse Compound Interest Rate Calculator
To create a calculator to get the compound interest rate in reverse using the RATE function, go through the following steps: ❶ Choose cells to insert the value of Initial Amount, Final Amount, and Period in Years. For this instance, I have picked cells D4, D5, and D6. ❷ Then insert the following formula in cell D8, In the formula above, D4contains the Initial Amount. D5contains the Final Amount. D6contains the Period in Years. ❸ Finally press the ENTERbutton to insert the above formula. Read...
Suppose, you’ve taken a loan of $5,000,000 from XYZ bank. After 5 years, you need to pay $8,550,000 in return. From this information, if you want to calculate the compound interest rate in reserve, then follow the steps below: In the problem above, Initial Amount = $5,000,000 Final Amount =$8,550,000 The period in Years =5 ❶ Now insert the Initial ...
To sum up, we have discussed the procedure to create and use a reverse compound interest calculator in Excel. You are recommended to download the practice workbook attached along with this article and practice all the methods with that. And don’t hesitate to ask any questions in the comment section below. We will try to respond to all the relevant ...
4 days ago · Use the compound interest rate calculator to compute the precise interest rate that is applied to an initial balance that reaches a certain surplus with a given compound frequency over a certain period.
Reverse compound interest - WorksheetMath. A worksheet where you have to find the original amount given the end amount and an interest rate and the number of years that rate of interest was applied for. Choose the currency, and how many years the compound interest should be applied for. Options for 'nice' numbers. Number of problems. 10 problems.
Sep 4, 2023 · Compound interest, or 'interest on interest', is calculated using the compound interest formula A = P* (1+r/n)^ (nt) , where P is the principal balance, r is the interest rate (as a decimal), n represents the number of times interest is compounded per year and t is the number of years.
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- The formula for compound interest is A = P(1 + r/n)^nt where P is the principal balance, r is the interest rate, n is the number of times interest...
- Multiply your initial balance by one plus the annual interest rate (as a decimal) raised to the power of the number of time periods (years). Subtra...
- The formula for calculating compound interest with monthly compounding is: A = P(1 + r/12)^12t Learn more
Mar 31, 2024 · The Reverse Interest Calculator uses the formula: Principal Amount = Accumulated Amount / (1 + (Interest Rate / 100))^Number of Periods. It inversely calculates the principal amount based on the provided accumulated amount, interest rate, and number of periods.
Feb 9, 2023 · by Raj Kumar. February 9, 2023. Simple Interest vs Compound Interest. Calculating Compound Using Operators in Excel. Mathematical Compound Interest Formula for Different Compounding Periods. Calculating Compound Interest using FV Function in Excel. Advanced Compound Interest Template/Calculator for all Compounding Frequencies.
