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Intervals to calculate compounding interest

  1. #1
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    Intervals to calculate compounding interest

    Hi,
    The attached chart uses intervals to calculate compounding interest - but because the number of days in a month varies, using whole numbers for the interval becomes less and less accurate as the timeframe increases. Ideally I would like to make this work by using numbers to 2 decimal points i.e 30.42 instead of just 30.
    PLEASE NOTE that I know there are formulae that will do this without an extensive spreadsheet but this is NOT what I want. I DO WANT to show the extensive spreadsheet, just with a more accurate way to automatically select every 30th (or more accurately 30.41667th) date / number and add the accumulated interest to the principal etc. Many thanks.
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  2. #2
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    Re: Intervals to calculate compounding interest

    Looking at the data it seems as if the interest is compounded on the 11th of each month, excluding February of 2018. If that is the case then try the following formulas:
    1) For balance: =IF(B5<--"2/12/2018",C$3,(IF(DAY(B5)=11,C4+F4,C4)))
    2) For int (column F): =IF(OR(B5<--"2/12/2018",DAY(B5)<>11),SUM(F4,E5),E5)
    Let us know if you have any questions.
    Consider taking the time to add to the reputation of everybody that has taken the time to respond to your query.

  3. #3
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    Re: Intervals to calculate compounding interest

    Hi JeteMc, Thanks for your response and sorry for the delay. I think you may not understand what I am trying to do here as your proposed changed are miles away from the outcome I am after. I don’t understand the relevance of the date 2/12/2018 in your formula either?
    I want the interest to compound monthly (but more accurately, every 30.42 days) and the compounded interest to be added to the principal monthly (but more accurately, every 30.42 days).
    The attached spreadsheet could be extended to show up to 30 years worth of data, so compounding interest every 30 days is not as accurate as compounding every 30.42 days over the long term. This is why I want to be able to use intervals like 30.42 (or perhaps 14 for fortnightly, 91.25 for quarterly compounding etc) Hope this helps. Regards
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  4. #4
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    Re: Intervals to calculate compounding interest

    Perhaps this will be more helpful.
    Cell F3 is populated with the value 30.41667 (from post #1)
    In helper column P, cell P6 is populated with the Excel value for the date 2/9/18 which is 43140
    The rest of the column is populated using: =SUM(P6,F$3)
    Column Q is populated using: =INT(P6)
    Column F is populated using: =IFERROR(IF(COUNTIFS(Q$6:Q$376,B5),E5,F4+E5),E5)
    Column C is populated using: =IFERROR(IF(COUNTIFS(Q$6:Q$376,B5),C4+F4,C4),$C$3)
    Note: columns P and Q may be moved and/or hidden for aesthetic purposes.
    Let us know if you have any questions.
    Attached Files Attached Files

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