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December 29th, 2018, 08:19 PM  #1  
Member Joined: Oct 2014 From: Mars Posts: 30 Thanks: 0  How to calculate interest % per year? (using POWER in EXCEL)
I'm trying to calculate the interest per year in MS Excel using the POWER() function, but don't quite understand how to calculate it. Sorry the forum is formatting my writing strangely... Lets say I have Quote:
But how do I plug these variables into the POWER(number, power) function in excel to get the same answer? Thanks in advance for your help! Last edited by Apple30; December 29th, 2018 at 09:03 PM.  
December 29th, 2018, 08:28 PM  #2 
Senior Member Joined: Sep 2015 From: USA Posts: 2,264 Thanks: 1198 
assuming interest accrues annually $P_V = P_I(1+r)^n$ $Profit = P_V  P_I = P_I((1+r)^n 1)$ $P_V \text{ is current value of the account}$ $P_I \text{ is the original investment}$ $r \text{ is the annual interest rate}$ $n \text{ is the number of years in the investment}$ in excel terms $Profit = P_I(POWER(1+r,n)1)$ where you've either named certain cells $P_I,~r~,n$ or you use the cell addresses in the formula above. 
December 29th, 2018, 08:49 PM  #3 
Member Joined: Oct 2014 From: Mars Posts: 30 Thanks: 0 
Sorry, I don't quite understand. R is "the annual interest rate", but I don't know what it is, that's what I'm trying to figure out. I only know the number of days, initial deposit, and return. 
December 29th, 2018, 09:30 PM  #4  
Senior Member Joined: Sep 2015 From: USA Posts: 2,264 Thanks: 1198  Quote:
btw, your mistakenly assumed a rate of 100% in your first post. The actual rate is 200%. $P_V$ is what you're calling the return $P_I$ is what you're calling the deposit $n$ is the length of the investing in years $P_V = P_I (1+r)^n$ $r = \left(\dfrac{P_V}{P_I}\right)^{1/n}  1$ $r = POWER(P_V/P_I,1/n)1$  
December 29th, 2018, 10:27 PM  #5 
Member Joined: Oct 2014 From: Mars Posts: 30 Thanks: 0 
Thanks Romsek!! I got it to work! 

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calculate, excel, interest, power, year 
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