FVSCHEDULE
The FVSCHEDULE function is used to calculate the future value of an initial principal amount after applying a series of compound interest rates over multiple periods.
Syntax 🔗
=FVSCHEDULE(Principal, Schedule)
Principal | The initial amount of money or investment. |
Schedule | An array or reference to a range that contains the compounding interest rates per period. |
About FVSCHEDULE 🔗
When envisioning the growth of an investment subjected to varying compound interest rates across consecutive periods, FVSCHEDULE emerges as the go-to function within Excel. By employing this function, financial analysts and investors can precisely determine the future value of an initial principal sum as it compounds under the influence of an array of interest rates applied periodically over time. This functionality is fundamental in assessing the potential returns on an investment under changing interest conditions and devising comprehensive financial strategies tailored to dynamic market environments.
Examples 🔗
Let's say you have an initial investment of $10,000, and you expect it to be subject to interest rates of 3%, 4%, and 5% over the next 3 years, applied annually. To calculate the future value of your investment after these periods, you can use the FVSCHEDULE formula as follows: =FVSCHEDULE(10000, {0.03, 0.04, 0.05})
Consider a scenario where you have a principal amount of $5,000 invested at an interest rate of 2%, 2.5%, and 3% for 5 successive quarters. To determine the future value under these compound interest rates, you can utilize the FVSCHEDULE function: =FVSCHEDULE(5000, B2:D2), where cells B2:D2 contain the interest rates.
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