using the plus sign in a formula

Hello all,

i was wondering what the difference is when using a plus sign in a compound interest formula ie:

=K9*(1+K10/K11)^(K11*K12)

=K9*(1.04/K11)^(K11*K12)

the substitute is an interest rate of 4% - not sure why the first works and the lower one does not?
thanks

Remember PEMDAS? the order of operations - parenthesis, exponents, multiplication, division, addition, subtraction. The reason that your two formulas get different results is that division comes before addition, so you cannot combine the 1 and the 0.04 until after 0.04 is divided by the value in K11

As Bernie has explained, (1+K10) will be equivalent to 1.04

Formula:

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Formula:

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Regards, TMS

You're welcome.



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