Help a man out, if you will.
I’m currently dealing with an agreement whereby interest on a principal sum is to be charged at 2.5% per month, compounded.
To me, that means that in the first month, one calculates 2.5% of the principal sum; in the second month, one adds that 2.5% from the first month to the principal sum and then calculates 2.5% of the resulting amount; and so forth ad infinitum.
However, I’ve been struggling to come up with an excel formula to do it for me which I freely admit is down to my own ineptitude.
All the online formulas/calculators require an annual interest rate, with interest to be compounded monthly based on that rate. I’ve come up with something like 34% p/a – does that sound right?
I could do it manually but there are several years’ worth of payments to calculate across a number of different principal sums, so automation would be preferred…