Microsoft Office Tutorials and References
In Depth Information
Using FVSCHEDULE to Calculate the Future Value for a Variable Scheduled Interest Rate
FVSCHEDULE tto Calculate
Calculate the
the Future
Future Value
Value for
for a Variable
Variable 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.
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 This is the present value.
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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