I'm trying to calculate compound interest on a series of sums.
I attach a file with a simplified version.
Column H calculates the interest the way that I have always done so. For each day that there is a transaction (eg money placed into an account) - it counts the number of days between the date of a transaction and the end of the year and calculates compound interest on a daily basis. That works fine (I think..)
To double check this, there is a cell that uses the same formula based on 365.25 days to come up with 5%, which is the interest rate after compounding per year.
I am looking at using a different approach which is in Column J. This needs a row for every day and calculates the interest using the same formula for 1 day on the running total.
The results are meant to be the same for both methods but the interest total is about 2% higher in one than the other.
Does anyone have any thoughts on what I am doing wrong here?
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