Custom Formulas – Excel Financial Calculator
A question from a student
How to write formulas in Microsoft Excel?
I’m trying to make a financial calculator on Excel for a $5000 investment in a mutual fund paying 15%.
B1 is 5000 (my investment)
B2 is 10 (how long I wish to be invested in years)
B3 is 15% (interest rate per year)
How do I write a formula to find out how much money I will gain?
I also know the mathematical formula: Amount after 10 years=5000(1+15%)^10 but when I use this formula Excel displays a message and offers a correction.
Once the data has been entered as mentioned above, you input the mathematical formula first and correct it using the ‘*’ sign between the invested amount and the opening bracket.
You can also use the Excel worksheet cell addresses to calculate the results. This is a better approach than the conventional mathematical formula because the former offers the option of changing the inputs quickly and easily and allows the recalculations of results automatically and you have a financial calculator.
Often you can find inbuilt Excel formulas which serve the same purpose and offer more flexibility of use. In this case we can use the FV or Future Value function to calculate the value of an investment after 10 years in a mutual fund.
Watch the training video below to learn how to use custom formual in Excel and create a financial calculator: