# Thread: PV (and FV) Functions (Excel 2003)

1. ## PV (and FV) Functions (Excel 2003)

Just a simple question which probably has a simple answer that I can't immediately put my finger on. One of the uses of PV is to find out how much you need to invest each month to reach a goal at the end of the Nper (this uses Fv but not PMT arguments). As I understand it, the other use is the opposite; if you invest a certain amount of money (say \$2000) each month for 36 months at 5% interest, how much is that investment worth now. Using the PV function, the result is \$66,731.40. Shouldn't the investment return be worth at least what you put into it (2000 X 36 or \$72,000)? Why is the result lower than the actual money invested. Thanks in advance for any info.

2. ## Re: PV (and FV) Functions (Excel 2003)

You can view it in two ways:

- How much can you loan from the bank if you pay \$2,000 a month for 36 months at 5% yearly interest? You can loan less than 36*\$2,000 = \$72,000 because you pay the interest to the bank.
- How much do you have to pay now if you want to receive \$2,000 a month for 36 months at 5% yearly interest? This is less than \$72,000 because part of what you receive is interest.

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