Need help with calculating a compounding value

**shg** · 01-15-2009, 12:36 PM

=1000*(1 + 10%)^N where N is the number of years

**bouvougan** · 01-15-2009, 02:18 PM

This formula gives me the amount for each year, but I need a cumulative total of all the amounts for a given year. In my example, I need to formula that returns 2310 for year 2, and 3641 for year three. Thanks in advance for your help.

**shg** · 01-15-2009, 02:31 PM

=amt * ((1 + int) ^ (N + 1) - 1) / int

... where amt is the initial amount, N is the number of periods, and int is the compounding rate, e.g.,

      -A- ----B---- -------------------------C-------------------------
  1   amt 1,100.00                                                     
  2   int    10%                                                       
  3                                                                    
  4    N     Sum                                                       
  5    0  1,100.00  B5 and down: =amt * ((1 + int) ^ (N + 1) - 1) / int
  6    1  2,310.00                                                     
  7    2  3,641.00                                                     
  8    3  5,105.10                                                     
  9    4  6,715.61

**bouvougan** · 01-15-2009, 04:01 PM

This formula works great with one exception. If I try to calculate without using a compounding rate, which will need to be done in some cases, it results in a division by 0 error and does not let me calculate the cumulative totals by year with zero interest.