![]() For example if you rounded log(2) to 0.301 and log(1.005) to 0.00217, then your final answer would have been about 11.577 years. P is the gross amount (after the interest is applied). Here: P is the principal or the initial investment. From the graph below we can clearly see how an investment of Rs 1,00,000 has grown in 5 years. ![]() An investment of Rs 1,00,000 for 5 years at 12 rate of return compounded annually is worth Rs 1,76,234. The compound interest formula is: P ’ P (1+R/N)NT. Compound Interest P (1 + i) n 1 P is principal, I is interest rate, n is number of compounding periods. Note that your answer may come out slightly differently if you had evaluated the logs to decimals and rounded during your calculations, but your answer should be close. Now that weve understood how compound interest works lets learn how to calculate compound interest in Excel using the compound interest formula. Step 3: The current interest rate is provided by default for your information. Note that the maximum amount you can deposit in the PPF account is Rs.1.5 lakh per financial year. It will take about 11.581 years for the account to double in value. Step 2: Under the label ‘Yearly Deposit Amount’, enter the amount you are planning to deposit in your PPF account over a financial year. Since interest is being paid monthly, each month, we will earn \frac=N Approximating this to a decimal The 3% interest is an annual percentage rate (APR) – the total interest to be paid during the year. ![]() Suppose that we deposit $1000 in a bank account offering 3% interest, compounded monthly. ![]()
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