Explanation
The general formula for simple interest is:
interest=principal*rate*term
So, using cell references, we have:
=C5*C7*C6
=1000*10*0.05
=500
Explanation
The FV function calculates compound interest and returns the future value of an investment over a specified term. To configure the function, we need to provide a rate, the number of periods, the periodic payment, and the present value:
- Present value ( pv ) is the named range G4
- Rate is provided as annual rate/periods, or rate /C5
- Number of periods (nper) is given as periods * term, or C5 * term
- There is no periodic payment, so we use zero (0)
By convention, the present value (pv) is input as a negative value, since the $1000 “leaves your wallet” and goes to the bank during the term.
The named ranges automatically behave like absolute references , so there is no need to use dollar signs ($).
