What is the formula to calculate compound interest in Excel given principal P, rate r, number of compounding periods n, and time t?

Question

Microsoft Excel — Medium

What is the formula to calculate compound interest in Excel given principal P, rate r, number of compounding periods n, and time t?

Accepted Answer

The formula =P*(1+r/n)^(n*t) calculates compound interest by incorporating the effect of compounding frequency. This formula is correct because it accounts for the number of compounding periods. Options A and C are incorrect as they don't consider compounding frequency, while option D uses the FV function incorrectly.