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In article <6AUG199202140982@jetson.uh.edu>, hcls6@jetson.uh.edu (Porter, William M.) writes:
|> This may be quite simple, but it has me stumped. I've searched through
|> the manual to no avail. 
|> 
|> I'm using Excel 4.0 (for the Mac, though it doesn't seem to make much
|> difference). My 12-year-old daughter deposits her babysitting earnings
|> in the Bank of Dad, earning 10% interest, which I would like to compound
|> daily. (Too bad federal law prohibits me from depositing there myself!)
|> 
|> Anyway, is there a formula by which I can calculate the interest to be
|> added to her account at any time--that is, more or less randomly? That
|> is, say there is $100 in her account on August 1, and then on August 6
|> she deposits $12 more. I'd like to be able to calculate the interest
|> on that $100 for the six days it was on deposit, and THEN add the new
|> $12. Simply taking 1/365th of 10% of $10 and multiplying it by the 
|> number of days won't do (though the resulting error with such small
|> amounts of money will be negligible): that simple approach (which I'm
|> using currently) doesn't actually >compound< the interest. That is, 
|> her interest earning on August 2 should be slightly higher than her
|> interest earning on August 1. Does this make sense?
|> 
|> Any help would be appreciated. Post here or send me e-mail direct. 
|> 
|> William Porter
|> Classical Languages: University of Houston
|> Houston, Texas 77204-3784
|> Internet: hcls6@jetson.uh.edu
|> CompuServe: 75430,1351
Bill,

  I saw your posting and thought the following might help.  I set up
the following table in 1-2-3 to solve the problem.


                     Starting
              Daily  Balance
  Starting  Interest  Plus      Deposits/   Ending
  Balance    Earned  Interest   Withdrawls  Balance   Day

    100.00    .0274   100.03       0.00      100.03    1
    100.03    .0274   100.05       0.00      100.05    2
    100.05    .0274   100.08       0.00      100.08    3
    100.08    .0274   100.11       0.00      100.11    4
    100.11    .0274   100.14       0.00      100.14    5
    100.15    .0274   100.16      12.00      112.16    6
    112.16    .0307   112.20       0.00      112.20    7


   Interest Rate Used    = 10%
   Daily Interest Earned = Starting Balance * (0.1/365)
   Ending Balance = Starting Balance Plus Interest +
                    Deposits/Withdrawls.  In other words, Deposits and
                    Withdrawls are done after calculation of interest.

   This problem can also be solved by applying the following formula:

   100 * ((1 + (0.1/365))^6) = 100.16

   where 100 = Principle
         0.1 = Annual Interest Rate
           6 = Number of days

   Add your deposit/withdrawl to the 100.16



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