To calculate the compound interest on an investment using the COMPOUND function in Google Sheets, you can follow these steps:
- Open a new or existing Google Sheets document.
- In an empty cell, type the following formula:
=COMPOUND(interest rate, number of periods, present value, future value).
- Replace the values in the formula with the specific values for your investment:
- "interest rate" is the interest rate per period (for example, if the interest rate is 5% per year, the rate would be 5%/12 for monthly compounding, 5%/4 for quarterly compounding, or 5% for annual compounding).
- "number of periods" is the total number of compounding periods (for example, if the investment compounds monthly for 3 years, the number of periods would be 12 * 3 = 36).
- "present value" is the initial investment amount or present value.
- "future value" is the desired future value of the investment.
- Press Enter to calculate the compound interest.
The cell containing the formula will display the calculated compound interest based on the provided values.