How to Use the FVSCHEDULE Function in Google Sheets

Have you ever wondered how to calculate the future value of an investment with varying interest rates? Look no further! In this article, we will walk you through the FVSCHEDULE function in Google Sheets, which allows you to do just that.

Syntax of the FVSCHEDULE Function in Google Sheets

Before we dive into the details, let’s familiarize ourselves with the syntax of the FVSCHEDULE function:

FVSCHEDULE(principal, rate_schedule)

The function takes two arguments:

1. principal – The initial capital or value you want to compound against (Present Value aka PV).
2. rate_schedule – An array or range of interest rates to compound against the principal.

Example to the Use of the FVSCHEDULE Function in Google Sheets

Let’s say you have invested $10,000 that will return 4% in the first year, 3.5% in the second year, and 3% in the third year. Using the FVSCHEDULE function, you can calculate the future value of this investment. Here’s how the formula looks like in Google Sheets:

=FVSCHEDULE(D3, D4:D6)

In the above formula, the PV (principal) is in cell D3, and the varying interest rates are in the range D4:D6. When you apply this formula, it will return $11,086.92 as the future value of your investment.

Usage Notes

There are three ways you can specify the rate_schedule in the formula:

1. In a percentage format, like in the above example.

2. Using the UNARY_PERCENT function, for example:

   • The formula to be used in D4: =UNARY_PERCENT(4)
   • In D5: =UNARY_PERCENT(3.5)
   • In D6: =UNARY_PERCENT(3)

3. Using decimals, such as 0.04, 0.035, and 0.03 in D4, D5, and D6, respectively.

It’s important to note that if you hardcode the values (PV and the Interest Schedule) within the FVSCHEDULE function, the formula would look like this:

=FVSCHEDULE(10000, {0.04, 0.035, 0.03})

The formula treats blank cells as 0, and it will return a #VALUE! error if any non-numeric values are present in the cells.

Fixed Interest Rates in the Interest Schedule

Now, let’s address the difference between the FV and FVSCHEDULE functions in Google Sheets.

If the interest rate is fixed, you should use the FV function. However, if the interest rates vary, the FVSCHEDULE function is the way to go. Let’s compare the two with an example:

In cell D8, use the FVSCHEDULE function:

=FVSCHEDULE(D3, D4:D6)

See that the interest rate remains 4% in all three years. The above formula will return $11,248.64.

Alternatively, in cell H8, you can use the FV function:

=FV(H3, H4, H5, H6)

This formula will also return the same result.

Remember, if the interest rate is fixed, use the FV function. But if the interest rates vary, opt for the FVSCHEDULE function.

That’s all there is to it! Now you can make informed investment decisions using the powerful FVSCHEDULE function in Google Sheets. For more helpful tips and tricks, visit Crawlan.com. Happy calculating!