Although Microsoft Excel or most calculators does not include a function for determining compound interest, you can use the following formula for this calculation
FV=PV*(1+R)^N
where PV is present value, R is the interest rate over the period N, and N is the number of investment periods, and FV is the future value of the investment in N periods.In this example, let's assume we have $100,000 and expect an 8% rate of return for 10 years. We also assume the interest will compound (interest is reinvested and we get interest on interest).
FV = 100000 * (1 + .08) ^ 10
FV = 215892.50
This means that in 10 years our $100,000 investment growing at 8% will have grown to $215,892.50. That is not taking inflation into account which would likely reduce the buying power of that money, but nonetheless, the balance would be as calculated.
If the interest was not compounded, the FV would have been $180,000. The calculation would have been essentially FV = (PV * R * N) + PV
