How to calculate compound interest in Excel

Q: How do I make a year-by-year table?

List the years in A, then =$B$2*(1+$B$3/$B$4)^($B$4*A9) filled down.

Formula (Excel and Google Sheets)

=B2*(1+B3/B4)^(B4*B5)

Use principal × (1 + rate/n)^(n × years): =B2*(1+B3/B4)^(B4*B5), with n the number of compounding periods per year.

Result on the example: $15,669.93 in B6
Works in: Every current version
Google Sheets: Same formula

See it work

The formula is already in B6. Change any input and the result updates, or edit the formula to experiment.

How it works

Each period, interest is added to the balance, and the next period's interest is charged on the bigger balance. With monthly compounding the rate per period is 4.5%/12 and there are 120 periods, so the principal is multiplied by 1.00375 a hundred and twenty times.

=B2*(1+B3/B4)^(B4*B5)

Result15669.92776

B2$10,000
The value in B2.
B34.5%
The value in B3.
B412
The value in B4.
B3/B40.00375
The / operator divides.
1+B3/B41.00375
The + operator adds.
B510
The value in B5.
B4*B5120
The * operator multiplies.
1+B3/B4)^(B4*B51.566992776
The ^ operator raises to a power.
B2*(1+B3/B4)^(B4*B515669.92776
The * operator multiplies.

In Google Sheets

The same formula works in Google Sheets: =B2*(1+B3/B4)^(B4*B5). We ran it in Google Sheets mode on the same data and it returns $15,669.93.

Other ways to do it

Each one was run on the same example sheet.

Formula	Result	When to use it
=FV(B3/B4,B4*B5,0,-B2)	$15,669.93	FV does the same calculation, and can add regular deposits as its third argument.
=B2(1+B3/B4)^(B4B5)-B2	$5,669.93Different result	Subtract the principal to see the interest earned. Interest only: $5,669.93.

Common mistakes

Leaving out n and using (1+B3)^B5 compounds once a year, which gives less than monthly compounding.
Write the rate as 4.5% or 0.045, not 4.5, or the balance explodes.

Try it yourself

Same data, empty answer cell. Your formula is graded instantly, then re-checked on changed data, so a typed-in number won't pass.

Calculate compound interest

In B6, calculate the balance after B5 years on the principal in B2, at the rate in B3 compounded B4 times a year.

Questions

How do I calculate continuous compounding?

Use EXP: =B2*EXP(B3*B5).

How do I make a year-by-year table?

List the years in A, then =$B$2*(1+$B$3/$B$4)^($B$4*A9) filled down.

Checked by running on 2026-10-30: every formula and result on this page was calculated by the Spreadsheet Practice formula engine, in both Excel and Google Sheets modes.