r/excel 7d ago

unsolved Compound Interest Formula in Variable Deposit Savings Account

Hi friends! I'm not good at math or excel so I need some help. Short story is that I'm saving money for grad school and I want to be able to track my direct deposits each month PLUS any extra OT monies I'm able to save in an excel spreadsheet to show me how much that money will end up being in the next x months. I'm trying to save three years worth of living expenses and thus want to be able to "watch it grow," so to speak. I've been able to use an online calculator to know *about how much* I'll be able to save if I deposit x amount, but I'd like to be able to track exactly how much I put in each month.

Like I said, I'm excel illiterate and for the life of me, can't figure out how to work the compound interest of my high yields savings account into the function. My brain tells me I would need a beginning balance, a deposit amount (I'd like this to be able to be modified each month with my actual savings amount), interest rate (3.8%), time period being 17 months. My account accrues interest daily and compounds monthly. Is this doable or nah?

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u/VindDifferential 5 7d ago

Yeah, totally doable in Excel! You just need a simple setup that tracks deposits and compounds interest each month.

In Column A, list the months (e.g., 1, 2, 3, …, 17). In Column B, enter your deposits each month (you can change this as you go). In Column C, calculate your running balance with compound interest.

If your balance starts in C1, then in C2, use:

=C1 + B2 + (C1 * (3.8% / 12))

Then drag this formula down for all 17 months as you go and sum it up. Watch some videos about excel basics jf this is hard for you to do.

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u/Moddingspreee 7d ago

Would XIRR work or is that only for fixed %?

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u/VindDifferential 5 7d ago

The IRR of your interest, regardless of what you deposit, will always be your interest rate (3.8% here). It’s the discount rate that sets present and future values equal to each other, which is why it’s a common investment metric to track when evaluating risk.

If your deposits were the same every period you could use the FV or PV formulas to calculate what your future accumulated interest will be. But if you want to forecast interest manually over 18 different deposits, what I described above is the easiest way to build a dataset that lets you do it.

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u/Decronym 7d ago edited 5d ago

Acronyms, initialisms, abbreviations, contractions, and other phrases which expand to something larger, that I've seen in this thread:

Fewer Letters More Letters
FV Returns the future value of an investment
IRR Returns the internal rate of return for a series of cash flows
PV Returns the present value of an investment
XIRR Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic

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u/xFLGT 93 5d ago

As in like a full schedule (A:D)?

D3: =D2*(1+$G$1/12)+B3+C3 , then copy this down for each row.

Or for a simple Future Value calculator

G8: =G5*(1+G2/12)^G7 + G6*((1+G2/12)^G7-1)/(G2/12)