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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



--
==========================================================================
J. Mark Toms                                email: mtoms@ems.cdc.com
Baltimore Gas & Electric, Company
C/O Empros Systems International            Phone: (612) 553-4423
2300 Berkshire Lane North                     FAX: (612) 553-4018
Plymouth, Minnesota  55441-3694 USA      Mailstop: PLY060
==========================================================================

Hello, netters! I want to thank Mark Toms (to whose posting I am responding
here) and the dozen or so other visitors to this group for excellent responses
to my query about calculating interest on my daughter's deposits in the "Bank
of Dad". The formula Mark Toms suggested was suggested by many who wrote to me:

>   100 * ((1 + (0.1/365))^6) = 100.16
> 
>   where 100 = Principle
>         0.1 = Annual Interest Rate
>           6 = Number of days
> 

Of course, given that my daughter's entire balance right now is just over $100,
the difference between this formula for compound interest and the formula I was
using earlier (which did not compound) is negligible. But I am glad to have it
right anyway. Hey, who knows! Maybe she'll get rich and deposit it all with ME!

William Porter  * * * Classical Languages: University of Houston
Internet: wmporter@jetson.uh.edu /or/ CompuServe: 75430,1351

Posted on behalf of a friend:
Using excel, I want to find the rate of return on an investment where
I deposit $1000/month for 10 years and wind up with $200,000.

What's the formula for finding out this annual rate of return?

Please email, I will post summary if there's interest :-)
Kurt