Hello,

I must be missing something -- heres the question.

If I use the Excel PMT(rate, number of periods, beginning balance, 0,0)
function, I can obtain the payments that would be made from an annuity, given
the three parameters shown with the function above. The last two values are
for €œfuture value€� which is set to zero, and €œtype€� which can be a zero or 1,
but I set to zero.

Once I obtain the payment, I should be able to reverse the calculation and
obtain the original value by using the FV(rate, periods, payments, present
value, type) function.

The problem is that once I use the PMT function, the reverse isnt giving me
the correct value. For example, the following items€¦

PMT settings

Rate = .04
Periods = 3
Beginning Balance = 10,000
Last two variables set to zero
Results (payment) = $3,603.49

FV settings

Rate = .04
Periods = 3
Payments = $3,603.49
Last two variables set to zero
Result (future value) = $11,248.64


What is the explanation of the difference between these two?
Why isnt the result of the FV function $10,000 in this example?

Keith