Looking for help on figuring out compound interest formula with Increasing interest each year.
so for example.
Start with $100. first year pays 3%. each year, the 3% increases by 5%.
so year 1, on $100, you are paid 3%, or $3. total $103. NOTE--THE VALUE COMPOUNDS ONCE A YEAR.
second year, you start with $103, but the 3% interest jumps to 3.15%. you end the year with $106.24.
and so forth.
someone helped me with the formula of this.
=ROUND(B2*PRODUCT(INDEX(1+B3*(1+B4)^(ROW(1:20)-1),0)),2)
and it works fine. my goal is to find the resulting value after 20 years. you can see in the sheet it is correct, at $262.85.
heres my question....how can i change this formula to where the interest COMPOUNDS 4 times a year, and splits the initial 3% 4 times a year, like a dividend. but the Interest increase only increases once a year (like originally).
so to be more specific. in the original example, 3% is paid in interest once a year. in the new question, the scenario is 3%/4 = 0.75% is paid after 3 months, then 0.75% at 6 months, another 0.75% at 9 months, then last 0.75% at 12 months (total 3%). at the end of the year, the 3% is increased 5% to 3.15%
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