Microsoft Office Tutorials and References
In Depth Information
Using FVSCHEDULE to Calculate the Future Value for a Variable Scheduled Interest Rate
Using
Using FVSCHEDULE
FVSCHEDULE tto Calculate
Calculate the
the Future
Future Value
Value for
for a Variable
Variable Scheduled
Scheduled
Interest Rate
Interest Rate
The FV function discussed at the beginning of this chapter assumes a con-
stant interest rate. If you have a loan agreement that specifies a variable
interest rate for future years, you can calculate the future value based on
the scheduled interest rate. To do so, you use the FVSCHEDULE function.
Syntax:
FVSCHEDULE(principal,schedule)
The FVSCHEDULE function returns the future value of an initial principal
after applying a series of compound interest rates. Use FVSCHEDULE to cal-
culate the future value of an investment with a variable or adjustable
rate. This function takes the following arguments:
principal
principal This is the present value.
schedule
schedule This is an array of interest rates to apply.
The values in schedulecan be numbers or blank cells; any other value pro-
duces a #VALUE! error for FVSCHEDULE. Blank cells are assumed to be zer-
os, which means no interest.
Figure 13.27 shows three examples of variable interest rates.
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