**Excel** is the most widely used tool when it comes to dealing with huge datasets. We can perform myriads of tasks of multiple dimensions in **Excel**. It is possible in **Excel** to calculate both **compound interest rates** and **simple interest rates**. Moreover, you can also convert them from one to another. In this article, I will show how to convert **compound interest** to **simple interest** in **Excel**.

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## Introduction to Compound Interest and Simple Interest

**Compound Interest Rate**: Compound interest (or compounding interest) is the interest amount calculated based on * both the initial principal and the accumulated interest from previous* periods. The formula to calculate compound interest is

**I=P(1+r)^n-P**

Where,**P** = Initial Principal**r **= Compound interest rate**n** = Time period (years)

On the other hand, the simple interest rate is calculated based __on the initial principal only__. The formula is

**I = P*n*R**

Where,**P** = Initial Principal**n** = Time Period (years)**R** = Simple Interest Rate.

For a certain **compound interest rate**, we can find out the equivalent **simple interest rate**.

Letâ€™s assume your initial principal amount is **P**. The compound interest rate is **r%** and the equivalent simple interest rate is **R%**. The common time period is **n** years. __The compound rate and its equivalent simple interest rate will return the same amount of interest__. Hence,

**P*n*R = P(1+r)^n-P**

*â‡’ R = ((1+r)^n-1)/n***This is the relation between the compound interest rate and the simple interest rate.**We will use this relation to calculate the equivalent

**simple interest rate**.

## 3 Easy Steps to Convert Compound Interest to Simple Interest in Excel

This is the dataset that I am going to use for this article. I have some **compound interest rates** and am going to convert them to **simple interest rates**. The time period is **4** years.

### Step 1: Write Down Formula to Calculate Simple Interest Rate

- Go to
**C7**and write down the following formula

`=((1+B7)^$C$4-1)/$C$4`

### Step 2: Determine Simple Interest Rate

- Press
**ENTER**to determine the**simple interest rate**.

- Convert the output to the
**percentage****format**.

### Step 3: AutoFill to Complete Compound Interest Rate Conversion

- Now, use the
**Fill Handle**to**AutoFill**up to**C13**.**Excel**will calculate the equivalent**simple interest rates**.

## Things to Remember

- The
**Absolute Reference****($)**is used to lock**C4**.

## Conclusion

In this article, I have shown how to convert **compound interest** to **simple interest** in **Excel**. I hope it helps everyone. If you have any kind of suggestions, ideas, or feedback, please feel free to comment down below.