Monday, July 03, 2006

Dicom as a Financial Calculator: Compound Interest Rate

Function Description

Following Dicom financial function calculates the compound interest rate of an one time investment:

Irr1(nper, pval[USD], fval[USD])

  • In the above function syntax, units in square brackets [] are optional.
  • nper is the number of period to be invested. It is a value without unit.
  • pval is the present value of invested amount. It can be without unit or with currency unit such as USD.
  • fval is the future value of invested amount. It can be without unit or with currency unit such as USD.
Example

Calculate the annual compound interest rate for an 100 US Dollars investment if the expected net future value is 200 US dollars after a period of 10 years.

Using pct for percentage:
Irr1( 10, 100 USD, 200 USD ) = 0.0717734625362931

Without using currency unit:
Irr1( 10, 100, 200 ) = 0.0717734625362931

So the compound interest rate is approximately 7.18%.

Dicom unit conversion calculator is available here for free download.