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.